Paying taxes while avoiding fraudulent transfer

[deban]

What is the name of your state (only U.S. law)? Florida

I am a judgment debtor. I have a home with my husband in which we live. I and my husband have homestead exemption on this and we both are joint owners of this home. We have a piece of land in Florida which is tenancy by entirety with my husband. Both these were purchased prior to filing the lawsuit therefore the judgment creditor cannot take away these properties. Now I need to pay annual taxes on these two and the bill for each of these is jointly on my name and my husband’s name. Now my question is:

(i). if I pay all the taxes from my personal bank account then will it be considered as fraudulent transfer?
(ii). If the answer is yes for the above question then if my husband gives me (by writing a check to me) half the amount of the total taxes (prior to me paying the taxes) and then I pay the complete taxes from my personal bank account then will it be still considered as fraudulent transfer?

I wish to pay both the taxes from my personal bank account if at all it will not raise fraudulent transfer flag. I have some money in my personal bank account and I wish to spend it before the creditor places a hold on it therefore, I am interested in paying the taxes from my personal bank account. My husband has very little income and my family runs primarily on my salary.

I read Chapter 726 of Florida fraudulent transfer statutes and I am still confused.

What is the best way to pay the taxes (if at all possible, from my personal bank account) while avoiding any fraudulent transfer?

 

[adjusterjack]

Read 726.105 and 726.106 again.

http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0726/0726ContentsIndex.html&StatuteYear=2017&Title=->2017->Chapter 726

It's clear that paying taxes is NOT a fraudulent transfer.

 

[deban]

Thank you and I appreciate.

I do agree that there is no “tax” mentioned in the statutes. However, 726.106 states “…without receiving a reasonably equivalent value in exchange for the transfer or obligation and the debtor was insolvent at that time.”
The creditor may argue that I did not receive EQUIVALENT value in return because I received only around half of the equivalent value because my husband has received the remaining half (or at least some).

Similarly, 725.105(2)(h) states “The value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred.”
and the creditor can again make the same argument mentioned above

 

[adjusterjack]

None of that has anything to do with you paying taxes.

 

[deban]

Thank you again.

In fact, paying tuition to college going children is also raised as fraudulent transfer during bankruptcy (in another state). For example, search Google using the phrase "Robbing Peter to Pay for College?" I am seeing the similarity between "paying taxes" and "paying tuition" arguments.

 

[LdiJ]

Thank you again.

In fact, paying tuition to college going children is also raised as fraudulent transfer during bankruptcy (in another state). For example, search Google using the phrase "Robbing Peter to Pay for College?" I am seeing the similarity between "paying taxes" and "paying tuition" arguments.

There is zero similarity between paying taxes and paying college tuition. Taxes are an absolute requirement. Tuition is not.

 

[deban]

Thank you. I have a last query:

726.109(2) states as follows:
“…the creditor may recover judgment for the value of the asset transferred, as adjusted under subsection…[and] judgment may be entered against:
(a) The first transferee of the asset or the person for whose benefit the transfer was made…”

It seems, once I pay the entire tax from my personal account, my husband will also be a person for whose benefit the transfer was made. Therefore, I believe that the creditor can get judgment against my husband. Please advise me if I am wrong.

 

[deban]

Could someone answer my query?

 

[Zigner]

Could someone answer my query?

You got your answer and it doesn't change no matter how you reword the question. You paid taxes that you were required to pay.

 

[deban]

Thank you all, for the information, and I appreciate.

 

[deban]

I am now facing another issue. I am employed. I have head of household exemption because my husband and children are financially depending on me.

Due to some serious health reasons, I am planning to leave this country for around 2 months to get treatment in a developing country (far away from US) where I have some friends and the medical expenses are very low over there. I already filed notice of unavailability (for those 2 months) to the court. Now my question is: what I need to do if the creditor sent me a writ of garnishment while I am in the other country? This is because, Florida Statute 77.041 ”Notice to individual defendant for claim of exemption from garnishment; procedure for hearing” states
“IF AN EXEMPTION FROM GARNISHMENT APPLIES TO YOU AND YOU WANT TO KEEP YOUR WAGES, MONEY, AND OTHER PROPERTY FROM BEING GARNISHED, OR TO RECOVER ANYTHING ALREADY TAKEN, YOU MUST COMPLETE A FORM FOR CLAIM OF EXEMPTION AND REQUEST FOR HEARING AS SET FORTH BELOW AND HAVE THE FORM NOTARIZED. IF YOU HAVE A VALID EXEMPTION, YOU MUST FILE THE FORM WITH THE CLERK’S OFFICE WITHIN 20 DAYS AFTER THE DATE YOU RECEIVE THIS NOTICE OR YOU MAY LOSE IMPORTANT RIGHTS. YOU MUST ALSO MAIL OR DELIVER A COPY OF THIS FORM TO THE PLAINTIFF OR THE PLAINTIFF’S ATTORNEY AND THE GARNISHEE OR THE GARNISHEE’S ATTORNEY AT THE ADDRESSES LISTED ON THE WRIT OF GARNISHMENT. NOTE THAT THE FORM REQUIRES YOU TO COMPLETE A CERTIFICATION THAT YOU MAILED OR HAND DELIVERED COPIES TO THE PLAINTIFF OR THE PLAINTIFF’S ATTORNEY AND THE GARNISHEE OR THE GARNISHEE’S ATTORNEY.”

(i). Can I get a notary public in that country and get this form notarized and file with the court and also send a copy to the creditor or

(ii). Do I need to get it notarized by a notary public located exclusively in Florida or USA (which is not possible for me because I will be in other country by that time)? Or

(iii). Due to my notice of unavailability that I already filed, can I file the notarized affidavit once I come back to the USA (after that 2 months time)? Or

(iv). I gave power of attorney to my husband during my absence. Can he get the garnishment exemption form notarized on my behalf (and he sign it on my behalf in front of an attorney) and submit it to the court and the creditor on my behalf, with that 20 day time? Or

(v). Any other option?

I am very concerned of my health situation (and me absence from US) and also about this possible writ of garnishment. Please advise me.

 

[deban]

Could someone answer my query?

 

[Zigner]

Could someone answer my query?

Your question is really a bit specialized for this forum. You may wish to speak with a local attorney.

 

[deban]

Thank you and I appreciate.


Recently I talked to an young attorney about my situation and she suggested me to file a motion ("Motion”), if and only if the Creditor files for garnishment of my salary. In that Motion, the attorney advised me to explain my situation (stating that I am in another country and and getting treatment), by giving reference to my notice of unavailability (that I already filed with the court). She advised me to ask one of my friends to check my messages (email or postal) to get any updates on this case and ask that friend to help me file this Motion to the court (because I may not have internet access in that country or I may not be in a health position to do any internet activity) if and only if the creditor files for garnishment motion. The attorney advised me to file the affidavit claiming my head of household exemption as soon as I am back to US.

Any comment on this young attorney’s advice is greatly appreciated: I heard that this forum has several experienced lawyers.

 

[Zigner]

Thank you and I appreciate.


Recently I talked to an young attorney about my situation and she suggested me to file a motion ("Motion”), if and only if the Creditor files for garnishment of my salary. In that Motion, the attorney advised me to explain my situation (stating that I am in another country and and getting treatment), by giving reference to my notice of unavailability (that I already filed with the court). She advised me to ask one of my friends to check my messages (email or postal) to get any updates on this case and ask that friend to help me file this Motion to the court (because I may not have internet access in that country or I may not be in a health position to do any internet activity) if and only if the creditor files for garnishment motion. The attorney advised me to file the affidavit claiming my head of household exemption as soon as I am back to US.

Any comment on this young attorney’s advice is greatly appreciated: I heard that this forum has several experienced lawyers.

If your "friend" is an attorney, you're fine. Otherwise, what you're asking you're friend to do would almost certainly be a crime.