One more article on the effectiveness of foreign asset protection trusts in avoiding the claims of existing creditors: http://www.taxprophet.com/hot/oct98.htm (says they are expensive and useless).
Much more of this, Gfactor, and people are going to start getting the impression that it’s pretty hard to hide your assets and fool your creditors in a way that isn’t illegal.
Aw, shucks, we can’t have that. We’re all smarter than any creditor, right? So this oughta be easy. 
Two much more effective and legal ways of avoiding debts:
- Bankruptcy, though this will be tougher soon. Even if you file a chapter 13, though, you probably won’t have to pay back the whole debt.
- If the debt is not huge, leave the country, or at least the state. Offers you no defense, but neither do the options outlined above. Distance is one of the best deterrents to collection. I once won a case involving hundreds of thousands of dollars by getting the case dismissed on personal jurisdiction grounds. The case involved a letter of credit allegedly issued my my client, a bank in Hawaii, to a creditor in Oregon. The plaintiff sued in federal court in Oregon, and I managed to persuade the court that it lacked personal jurisdiction. As a result, the plaintiff would have had to sue in Hawaii, which it decided not to do. As a result, my client was not required to pay anything on the letter. (They had other defenses, too, btw).
Here is an amusing case about a related type of scheme that also did not work.
BTW, it undercores another potential source of trouble for Bob. If he’s not careful about what he is doing, he could go up the river for money laundering. Most money laundering statutes require the money to come from unlawful activities. But as this case shows, not all of them do.
Here are a few good sources of information about legitimate asset protection planning:
Bloomberg Industry Group (rtf)
http://www.itpa.org/open/archive/cainoffshore.rtf (rtf)
http://www.aaepa.com/documents/0306_EPJournal_AssetProtection_DS.rtf (rtf)
http://www.findarticles.com/p/articles/mi_qa3663/is_200404/ai_n9348767
http://wneclaw.wnec.edu/faculty/baker/APT.htm
As you can see, there are some complicated issues. Don’t try this at home kids, get the help of a professional, and do it before the creditors start knocking.
I think you have something here. If you could just file a petition saying that you are suing William J. Norton of 532 Sunshine Place, Richmond, Virginia because he is a stupid head, and have him served with legal papers informing him that he is being sued for being a “dummkopf in propia persona” and that his court date is December 5th, assuming that he won’t show up, the court may insist that you establish a “prima facie” case with some legally recognized justification (e.g. his dog attacked you) before granting you summary judgment.
If this wasn’t the case, all sorts of abuses could arise. I could get a phone book for Barrow, Alaska and pick random people and sue them locally in Virginia, asking the court for $500 judgments, and have Alaskan process servers serve the papers. Now, since it’s going to cost our northern Alaskan defendants more than $500 to defend against the suit (either hire a Virginia attorney, or take leave from work and buy a round trip ticket and a hotel stay to come to my local courthouse), they may decide that the cheapest option is to ignore it and take the default judgment. That’s unjust, since it makes a mockery of the legal system. I could even look for people in the local community who might be unlikely to appear (e.g. people with moderate mental disabilities who barely have enough capacity to live in the community), and wait for them to fail to appear, then garnish their welfare. That is obviously wrong.
Thanks for the response.
I think this is the most Zombi-fied thread in which I was the OP and got a response.