These days it seems all of us know someone who is on the verge of bankruptcy, facing foreclosure or up to their eyeballs in debt. Debt collection agencies are among the few thriving industries. Being faced with losing everything one has to debt collection is a nightmare and in some cases, the debt isn’t even a just one. The compound interest is designed to literally enslave us for years. When people are between a rock and a hard place and seek to do what is best for them and their loved ones, they come up with some very creative ways people obfuscate the trail for debt collectors and their hide assets.
Hiding Cash in a Bank
One of the most common ways people hide cash is to use a liaison to hide it for them in their bank account. A liaison is basically someone who, on your behalf, opens up a bank account, gets a phone, utilities, or signs a lease for you to hide the paper trail leading to your net worth. It is best to use someone who is not a member of your immediate family and also has little net worth themselves. This could be a student, nephew/niece, or undocumented worker. They get paid a small gratuity for the favor and also make out a will to indemnify you against any losses if they were to die suddenly in an accident or something. Just do not use your parents, spouse etc, because this is the first place the fact finding process of the investigators will look. Sometimes people will fake purchases through businesses owned by friends who then procure a phoney receipt. This makes it look like the money is gone and spent, but has actually been then hidden in a third party bank account.
If you open a bank account in another person’s name don’t tell anyone about it, it can be almost impossible for creditors to find. It is vital to make the account a non interest bearing one, like a basic checking account, as this type of account isn’t generally not be reported to the IRS by the bank – if there isn’t too much money in it. If you have lots of money to hide, then create many such small accounts and fly under the radar. The caveat though – if you are asked about accounts under oath and deny assets hidden in trust, this constitutes perjury.
The investigator working on behalf of the judgment creditor will commence a fact finding process that involves includes getting a deposition from you and reviewing all financial statements and tax returns in an attempt to ferret out your assets. If you have reported the interest or dividends, royalties or similar tax deductions on any or your tax returns, this information will show up and you will be asked to account for it.
Again, if you are compelled under oath to give an account of what happened to the money, not telling the truth could land you in federal penitentiary.