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  1. #1
    Join Date
    Jun 2013
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    5

    Default Are State-Chartered Delaware Bank Accounts Really Judgment Proof

    My question involves judgment recovery in the State of: CA

    I am a CA resident. If I put my money in a Delaware bank account that has no branches outside of DL, will it really be safe from creditors?

    This just seems too good to be true. After doing a bunch of research, I still haven't found a consistent straight answer.


    Some points that I would like to learn more about are:

    1) How common would it be for a court to rule personal jurisdiction over someone and force them to remove the funds under the threat of contempt?

    2) Is this DL bank account protection also true for federal court judgments?

  2. #2
    Join Date
    Mar 2013
    Posts
    18,340

    Default Re: Are State-Chartered Delaware Bank Accounts Really Judgment Proof

    Quote Quoting Ella76
    View Post

    I am a CA resident. If I put my money in a Delaware bank account that has no branches outside of DL, will it really be safe from creditors?

    This just seems too good to be true. After doing a bunch of research, I still haven't found a consistent straight answer.
    Looks like some of us are better at Google Fu than others.

    Here's the statute. It's 3502 (b):

    http://law.justia.com/codes/delaware...e10/c035/3502/

    And here's a couple of case decisions that support the statute:

    http://scholar.google.com/scholar_ca...=en&as_sdt=4,8

    http://scholar.google.com/scholar_ca...=en&as_sdt=4,8

    Quote Quoting Ella76
    View Post

    1) How common would it be for a court to rule personal jurisdiction over someone and force them to remove the funds under the threat of contempt?
    I have no idea (nor does anybody else, I'll wager) how "common" it is but it certainly is a risk. Especially in a divorce or if you make a "fraudulent conveyance" to stiff creditors.

    Quote Quoting Ella76
    View Post

    2) Is this DL bank account protection also true for federal court judgments?
    Sure looks like it.

    However, as always, consult an attorney before you attempt to shield assets from creditors.

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