Debtors’ Experience Hiding Cash

Most of my asset protection clients have significant cash warehoused in a bank account or a brokerage money market account. Many clients are often afraid that future creditors will garnish their bank accounts without notice. Often, I am asked if there is something they can do to protect cash accounts from surprise garnishment. I have been unable to offer anything better than the stock answer to “put the cash in the mattress.” This past week I met some new clients who seemed skilled in finding places to store cash where it could not be found or garnished by their creditors. I will relay their experiences and recommendations to others without my endorsement or guarantee.

These clients stated that they withdrew cash from their bank accounts and used the cash to purchase a variety of store gift cards or gift checks. They said that major chains such as Walmart and Target will sell unlimited number of prepaid store cards in $2,500 denominations. The clients used these cards to buy all their food and other living necessities. They said the stores do not require identification when purchasing or using the cards. These clients also used American Express gift checks which they indicated are available for purchase in larger denominations. Rather the buy their own gift checks, these people give their cash to their friends, have their friends buy the Amex gift checks, and the friends then give them the gift checks which can be used as cash to purchase items and are protected against loss.

These seem like novel and effective ways to store cash equivalents which cannot be garnished by surprise. Obviously, a debtor would have to disclose these store cards and gift checks if they are required to testify under oath during a creditor’s asset discovery. If anyone wants to share their experiences with cash equivalents or propose other solutions, please comment to this post.

Last updated on May 22, 2020

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