Stock Markets Exposed

What happens to my stock trading account if I file for bankruptcy?

Last year I stacked up credit card debt trying and ultimately failling to start my own business. Now I am sucessfully day-trading (at least enough to cover living expenses, but not the credit cards which have now gone to collection.) If I file for bankruptcy will I be force to sale my stocks and turn over the money?

Public Comments

1. Yes it can be siezed by creditors
2. They will make you invest in AIG and CityBank
3. I pretty much confident that your stock shares are considered to be Assets, and if you file for bankruptcy they usually take all your assets, so I would say you will loose your stock shares. But there are ways to protect your assets, please read below: The worst thing you can do is own assets in your own name. If you are ever sued, you could lose everything. This will be a very general discussion as there are many different ways you can structure things depending on your needs. You will need to discuss your individual circumstances with a professional adviser to get specific advice but this will give you food for thought and a basic understanding of what is available. The wealthy use these structures as part of their luxury lifestyles for tax planning, to protect their privacy, to protect their assets from seizure and for estate planning. They also use these structures to access investment opportunities that they as individuals may not have access to. The best countries for asset protection vehicles: Antigua Belize Bermuda The Cook Islands Lichtenstein Panama St Kitts & Nevis St Vincent & The Grenadines Seychelles Switzerland Vanuatu Western Samoa Here are some of the structures available in these jurisdictions that the wealthy use. 1. Trusts Trusts have been used to protect assets since the Crusades. Trusts are used in jurisdictions that are English common law based. That means all the British Commonwealth countries. The basic requirements of a trust are that you must have a settler (the person, usually you, who establishes the trust agreement and transfers the assets into the trust), a trustee (who takes title of these assets and manages them in accordance with the trust deed. The trustee is usually a company you set up or a professional trustee company you engage), and a beneficiary (the person or persons for whose benefit the trustee manages the assets). The trust, not the settler or beneficiaries, controls the assets so, if any of these people are sued, the assets cannot be taken. For estate planning the beneficiaries can be named as your children or grandchildren even if they are unborn. There are many countries that offer trusts. For privacy reasons it is best to have your assets held outside the country you live in. 2. Foundations Foundations originated in Roman times and can claim to be the original financial planning vehicle, predating trusts by around 1 000 years. Foundations and trusts are both used for the same thing but are structurally different. Technically, a trust is a common law legal action and does not exist as a separate legal entity. A foundation is a legal entity in its own right and it owns the assets transferred to it. This makes the foundation similar to a company but the foundation has no stock (shares). Also, because foundations are based on civil law and not common law they are harder to challenge than trusts. Trusts are hard to challenge; foundations are harder. It is also easier to change the management of a foundation than it is for a trust. The basic requirements of a foundation is that you must have a founder (equivalent to a trust settler), a foundation charter (equivalent to a trust deed), foundation protector (who has the power to remove or appoint council members and beneficiaries) and a foundation council (equivalent to a trustee). There are fewer countries that offer foundations than trusts but they are well regulated. 3. Companies Companies set up in the correct jurisdictions can give you most of the benefits of trusts or foundations. Companies are entities in their own right. The best way to set up a company is to use nominee directors and nominee shareholders or bearer shares. Nominee directors are directors you hire to control the company for you. You can also have nominee shareholders who are hired to own the company for you. Bearer shares are share certificates that are not issued in the name of a person. Anyone who 'bears' the certificate is the owner. By using nominees or bearer shares you do not actually legally own or control the company. This can give you tax and privacy advantages. For safety when using nominees, get signed undated resignations from them right from the start. If you don't like what they are doing, you can then date the documents and remove them. It is usually a government requirement now for incorporation agents to retain the bearer share certificates in a safe deposit box on your behalf. This keeps your certificate safe and stops you transferring the company to terrorists without the incorporation company being involved and performing their 'know your customer' duties. This is the best structure to use if you are planning to deal with the public, ie run a business. 4. Swiss Annuities There is an asset protection vehicle in Switzerland called the annuity. This is the insurance product that can be used to protect cash assets from lawsuits including bankr