Making Yourself Judgement Proof - Protecting Your Assets in Bankruptcy

I will be updating this post as new ideas emerge.

If you're here, you're probably looking for ideas other than 'MOVE TO THAILAND'. Up to $150,000 of your house is protected, and federal rules say $5,000 of your vehicle is also protected. Intangible goods are also protected.

*My advice is for those filing pro se. If you have 401k and investment accounts, visualize me shrugging right now. Get a lawyer. Pay for your lawyer with your credit cards that you are putting in bankruptcy. Sure, it's incredibly unethical and your trustee might lose their mind, but you could also pay that sweet $2k for magical asset vanishment.

BASICALLY, CONVERT YOUR LIQUID ASSETS TO DURABLE GOODS.

Some states, like Arizona, only allow $300 left in the bank account. This puts me in an extremely uncomfortable position.

Legally speaking, as of 2017, bitcoins are not currency, they are intangible property. Unfortunately, currently, the price of bitcoin, litecoin or dogecoin are variable. You're not even hiding it - even though it would be incredibly easy to do so - I just listed it.

Do you rent? 

Give them $2000. That's how much you're exempted!

Long winded post script: A lot of get out of debt gurus backup their assertions with facts and links to statutes. I will correct when I am proven wrong,  but otherwise I don't backup my research with citations. They're just ideas. Bankruptcy and creditor law for me is a forced hobby, and I like to spend as little time on it as possible. I believe in personal responsibility and accountability as much as the next person, and to be quite candid, I am ashamed I am unable to pay. In fact, maybe my experiences will move enough people to save a few bucks here and there in a country where there is no safety net.

Applying for every available avenue for relief via the government is an arduous task. We've privatized everything. I've applied for SSDI and been denied, food stamps denied, Medicaid didn't cover the procedures that put me in bankruptcy in the first place, or worse covered the procedures but the providers didn't accept Medicaid!

I've now privatized my defenses to compensate.  

Using arbitration against a creditor

Using pre-emptive arbitration is dependent on how much your debt is and is and how strict the venue is. In states like Wisconsin, I am judgement proof because I briefly received government assistance, to the tune of $6 per month. Arizona, however, is extremely creditor friendly. Luckily I had a year to prepare my case because I had gone through the process in Wisconsin. Arizona leaves you at most $300 of exemptions. Mostly the credit company files in Justice Court and hopes for no-contest, any motion to compel arbitration is denied. Maricopa County has a heavy case-load, so the courts are divided into small claims, and a civil justice court, and Superior Court (>10,000).

Justice Court has employees called Justices of the Peace. They’re not required to have any legal training, but then again, neither does the Supreme Court. A Justice of the Peace is an extremely lucrative position for a person without a law degree, or a degree at all, reaching the six figures. I apologize for the digression; the point is your motion to compel arbitration will likely be denied. The point of contention is even those without a degree should be able to understand the law regarding arbitration - it’s just they ignore in favor of the creditor. Two justices reviewed my case separately at different stages and both made errors. Perhaps not coincidentally, they formerly worked in the credit industry. This kind of makes sense - they’d be best designated to review the intricacies of a case like this. It also could make them pre-disposed to favor an industry that got them there (peace justices are elected).

The same goes for Guglielmo and Associates. They know about they are violating the contract, the Justices of the Peace know the law, they just cram it through. They tend to represent the Original Creditor and are not a Junk Debt Buyer. They make fees on contingency. It’s important to note an original creditor will spend $20,000 to collect $2,000. The logical assumption is they are protecting their right to collect in cases where they have a high degree of likelihood that the debtor is hiding massive assets.

This action, as of 2017, runs contrary to law.

I was able to weaponize arbitration against a company by filing a pre-emptive arbitration and the claim was dismissed. Their claim was for about $3,000. As soon as I got the dunning letter I filed for arbitration in an inconvenient venue. Always file in JAMS. I can’t say more about this case because I signed an non-disclosure agreement. FILE A CLAIM IN CALIFORNIA FOR NO REASON. The creditor will object because that’s obviously ridiculous - but they have to do so in a seven day window. Then, you’re protected from attorney’s fees during arbitration.

What are some claims you may have against a creditor?

This is a frequently asked question. There’s a class action case against Guglielmo and Discover in Nevada that basically dictated the debt validation was poorly worded, but Guglielmo and Associates in Arizona is a potent adversary. They followed the debt and FDCPA violations to a T save for one exception: they sent the debt validation letter to my neighbor. The creditor cannot contact you during the dunning period, or the five day period between when they need to validate the debt and when the debt is validated. Basically, their debt validation was invalid. I got lucky. Another possibility is contacting you at all during the dunning period, via telephone. One claim I filed for arbitration was emotional distress - I basically had nothing and if they would have followed through.

Of course, do they know they sent the letter to my neighbor and I didn’t get it until a month later? No, but they are going to pay a lot to find out. Right before I file bankruptcy, too.

A sample debt validation is as follows:

Pursuant to my privilege under the FDCPA, the undersigned request a validation of debt from your firm.

Your Signature.

You can add all sorts of requirements to the debt validation letter, but they are unnecessary for the creditor, they don’t have to in the eyes of law. Most do anyways, because the bar is so low.

Pre-Bankruptcy Credit Counseling Price Comparison

Pre-Bankruptcy Credit Counseling is required before Chapter 7 bankruptcy in the United States. All of the following services that require you to pay are also required to offer their services for free. After applying for 5 of these services, all 5 declined my application and required personal information I was not comfortable giving. The cheapest bankruptcy counseling certificate from the Tides Center no longer exists, and even that costs $5.

Those thinking of filing for bankruptcy will not want to spend more than $50 for this service, and they are all comparable in time, because the law requires the course to be 60-90 minutes.

	America Debt Resolutions	$0
	Freedom Credit Solutions	$0
	Bigsteptraining.org	$10
	DebtorCC.org	$10
	Academy of Financial Literacy, Inc.	$11
	Alliance Credit Counseling, Inc.	$19
	101creditcounseling.com	$20
	Debtor Ed's Credit Counseling, Inc.	$20
	Consumer Credit Counseling Service of Josephine County, Inc.	$20
	CRISS-CROSS, Inc.	$20
	1$ Wiser Consumer Education, Inc.	$20
	BKClass.com	$20
	Dollar Learning Foundation, Inc.	$20
	$0$ BK Class, Inc.	$24
	The Mesquite Group, Inc.	$24
	Debthelper.com	$24
	Goodwill Industries of KYOWVA Area, Inc.	$24
	Abacus Credit Counseling	$25
	Family Life Resources	$25
	Credit Advisors Foundation	$25