The short and easy answer: Don’t do it!!  We get this question all the time from either the person who has money problems or the friend or relative who is asked for the use of their bank accounts.  If you are asked by someone to let them use your bank account to hold money, it does not necessarily mean that they have really bad intentions.  It could mean they expect garnishments and want to make sure they have enough money for food and electricity until they get a long term plan.  On the other hand, yes, it sometimes means that the person is just trying to hide money and wants you to participate in a scheme.  No matter what led your friend or cousin to ask to use your bank account for their money, the answer should always be the same – “no.”  Simply stated, nothing good can come out of this for either of you.  If your friend is concerned about a garnishment or the bank holding up their money, it is best in the short term that they just keep it in cash rather than get others involved.  You should also encourage them to see a lawyer either to deal with the specific creditor or to discuss whether Bankruptcy is an option.  Even getting in this situation is a sign of larger financial problems.

For you, the consequences may be (relatively) worse as their problem becomes your problem.  If you put someone else’s money in your bank account to shield it from creditors, or take any other property for that purpose, it is generally called a “fraudulent transfer” or “fraudulent conveyance.”  Your friend transferred or conveyed the money or property to you in order to hide it.  It does not matter that both of you have good intentions, since the term “fraudulent” does not require actual, intentional fraud.  It also includes “implied fraud” when the result is potential harm to creditors.  If the creditor or Bankruptcy Trustee learns of the money in the account, they will file suit against you for fraudulent conveyance and this certainly does not look good for you or your credit report.  Worse, it is possible that you risk losing ALL the money in the account even if some of it is really yours or your friend already took out his money.  You will have work it out with the creditor or Trustee and account for all the funds going in and out of your account, and possibly spend money on a lawyer to make sure you don’t get a fraud judgment against you.

Hopefully if you are faced with this request you can have a positive conversation and help out your friend in the long term.  Sure, the chances are good that they will simply move on to ask someone else but all you can do is the right thing.  You can’t force someone else to do it.