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Home » Asset Protection » Using Cash Credit Cards To Hide Cash From Creditors

Using Cash Credit Cards To Hide Cash From Creditors

ByJon Alper July 29, 2008May 22, 2020

People trying to avoid judgment creditors often try to convert assets to cash and plan to hide the cash from discovery. Clients have told me from time to time about very creative strategies to hold and spend cash off the books. One client recently explained that he could convert available cash to a Visa debit card at certain stores around town. There is no limit on the balance he can buy on his Visa card. The store charges a 3% sales commission. The client says that the store does not ask for any form of personal identification including no drivers license and no social security number. Alternatively, many department stores will sell unlimited amounts of credit cards to by used at their own stores with no fee. My client told me that such store cards are sold at establishments such as Walmart and Sams.

There is nothing illegal about a judgment debtor using after tax money to buy a card. However, the same debtor will commit a crime if he denies having such a card when a creditor examines him under oath about his assets. Therefore, for this cash hiding strategy to work the debtor probably has to lie about it at some point in the judgment collection process.

A creditor will ask the debtor to reveal any and all assets whether or not specifically identified by the creditor attorney. Although many people will think its impossible for a creditor to discover such cash cards, there are always witnesses to the purchase and use of a cash card and a skilled creditor attorney or his investigators may find evidence of cash purchases. Another issue is that people become tempted to use this same tactic to hide cash income from the IRS. Asset protection is not unlawful, but tax evasion is a serious crime.

From my clients reports I know that people are using cash cards to hide assets. I am wary of any asset protection tool that involves hiding assets because I do not think there are any more secrets in today’s world. There are enough legal asset protection tools in Florida that people can effectively protect their assets without having to hide or lie about what they own.

Last updated on May 22, 2020

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Jon Alper

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Jon Alper is an expert in asset protection planning for individuals and small businesses.

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      • UTMA Accounts
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      • Business Entities
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      • LLC Operating Agreement
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    • Offshore Planning
      • Nevis LLC
      • Offshore Bank Accounts
      • Offshore Planning
      • Offshore Trusts
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      • Judgment Collection
      • Bitcoin and Cryptocurrency
      • Deficiency Judgments
      • Fact Information Sheet
      • Head of Household
      • IRS Tax Debt
      • Not Paying Judgments
      • Statute of Limitations
      • Wage Garnishment
      • Writ of Garnishment
    • Wills and Trusts
      • Avoiding Probate
      • Estate Planning
      • Gun Trusts
      • Inheritance Tax
      • Irrevocable Trusts
      • Last Will and Testament
      • Living Trusts
      • Living Will
      • LGBT Estate Planning
      • Power of Attorney
      • Probate
      • Special Needs Trust
      • Trust Administration
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      • Chapter 7 Bankruptcy
      • Chapter 13 Bankruptcy
      • Dealing With Creditors
      • Involuntary Bankruptcy
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