Email Article Print Article

Some Cocktail Party Grist and a Rule to Help You Stay Out of Jail.

By Rob Lambert - Email Editor

Date : August 14, 2008

Dear Valued Reader,

I am getting a lot of calls from folks who are totally upside down and unable to pay their bills.  There is nothing illegal or unethical about this.  It can happen to anybody and, indeed, it happened to me in the past.

Many of the unfortunate callers feel victimized by an out of control, faltering economy.

Some of the callers are willing to do anything to keep some of their hard earned money, even if it means disenfranchising existing legitimate creditors.

This is a classic issue.  Let me start by saying that I have no problem doing Asset Protection for people who are in trouble as long as they have more than sufficient assets to comfortably satisfy all existing and reasonably anticipated creditors.  A lawsuit or business failure does not rule out solid protection in many cases, provided sufficient assets to satisfy existing and anticipated creditors are reserved in an unprotected environment. 

Simply stated, Asset Protection works when you have more assets than creditors.  It does not work when you are fighting for survival and cross the line to protect assets that should be reserved for existing creditors.  Yes, the protection will work to protect assets that should not be protected; however, the price of this risky behavior may be your freedom. 

I want to point out some of the details around a fancy lawyer named H. Beatty Chadwick.  This once wealthy (and maybe still wealthy) lawyer was embroiled in a hard fought divorce in 1994.  During the process he moved more than $2 million dollars offshore and was ordered to bring the money back into the USA.  He refused.  The judge conducted a hearing and made a finding that Mr. Chadwick had the power to return the money and was defying the order by refusing to repatriate the money.  This not-too-smart lawyer fled after a bench warrant was issued. 

So far, not so interesting.  What makes this a good cocktail party conversation is that Mr. Chadwick was arrested in 1995 and is still in jail, more than 13 years later.   He just lost another appeal (his 13th I think) and, at 72 years old, is likely to spend the rest of his life in jail (he has cancer).

So, in a real sense, if you piss off a judge by refusing to comply with an order that you have the power to obey, you may find yourself in jail, surrounded by common criminals.  The difference is that you do not have a trial on the merits with a jury to decide your fate.  Instead, a single judge can take away your freedom and put you away for many years, perhaps even for the rest of your life.

I promised you a rule that might help avoid this type of situation.  The rule is simple: Never be a pig because pigs get eaten.  Always reserve plenty of money to MORE than pay your bills (and all of them).  With this reserve to satisfy your existing creditors, it is fine to protect the rest of your money.  You need to be able to demonstrate that you did not cross any lines. And I strongly suggest that you work with a practitioner who knows where these lines are and can keep you from crossing them.

So, don’t cross this line and have a healthy and protected week.

Rob Lambert

RELATED ARTICLES:

• Protect the equity in your home
• Asset Protection Plans
• C.A.L.M. Introduction
• Get educated on Asset Protection