DELAWARE BANK ACCOUNTS PROVIDE ASSET PROTECTION

Last year European authorities got angry with American authorities complaining about Swiss Bank accounts.  They responded to American authorties (particularly) the I.R.S., that you have Delaware and Nevada, which sometimes act as if they were offshore banking centers.  Why don't you clean these up before you find fault in the financial institutions and laws of other countries?

What does that mean to a lay person?  Well, let me be very specific.  Under Title10 Section 3502 of the Delaware Code, "banks, trust companies, savings institutions and loan associations" . . . "shall not be subject to the operation sof the attachment laws of this State."  This simply means that a creditor cannot garnish or attach funds in the bank account of a Delaware chartered banking institution or any bank or financial institution located in Delaware using state law collection procedures.  If you put your funds in the correct banking institution then your bank account is safe from creditors!  This state law does not bar the federal Internal Revenue Service.  The Supremacy Clause of the United States Consitution trumps Delaware law.

What banks do you use?  I would not use a nationally chartered bank.  That's the bank with "N.A." after its name.  Instead, use a Delaware chartered state bank that only has branches in Delaware.  You can find a list of these banks on the website of the Office of the Delaware State Bank Commissioner.  A deposit into a Delaware charted bank located in Delaware should protect your money.  Look for an account that allows you to wire money or to transfer money to other accounts online.  That way you can keep your current account in Virginia and use the Delaware savings account only when needed.

Please be aware, the Delaware account will give you only so much protection.  You may not lie on bankruptcy schedules, and if a court compels you to sign over the account on penalty of jail, then you will have to comply or else suffer the consequences.  Nonetheless, a Delaware bank account ought to be considered for asset protection



This blog is not intended to render legal services to the reader, including advice about bankruptcy or taxes. Consult with a lawyer concerning the specific application of the law to your unique circumstance.