Asset Protection Strategies
Judgment Prevention 101
Concerned about your exposure for a deficiency to lenders or other your exposure to other creditors?
The best strategies may not be that complex.
In most cases, before a creditor can sieze assets or garnish your salary, the creditor must file suit and obtain a court ordered judgment.
One of the best ways to prevent judgments is to deploy a solid loan workout strategy. Workouts may include a well negotiatied short sale or short
payoff in which the lender or lenders release the borrower from liability for the remaining loan balances.
However, sometimes the most iron clad workout is no workout at all. Check to see if you state has anti-deficiency laws, and if you state does make sure you
understand the exceptions to the rules.
(We may discuss how to dealing with credit card servicers and other credutirs at a later date.)
Asset Protection 101
At the core of many if not most asset protection startegies is the idea of homesteading in a debtor friendly state like Florida. (I read that Texas is a good debtor protection state as well.)
The protection concept is pretty simple, if you move to Florida, Florida may let you protect your home from creditors. (except the mortgage lender on the homesteaded property).
Is it easy to bury a lot of cash into a beautiful home on the water or on a golf course and protect it from creditors? It can be if you cross that state
line with the proper intent. Many counties in Florida will try to give you a hard time when you go in to declare your homestead, but if you do your
homework and really intend it to live in the property as your primary residence. Your equity in that property should be protected from creditors.
Is Homesteading in Florida a good idea?
In some cases Florida Real Estate has dropped over 50% or more. Prices may drop futher more but there are some good values right now in the
Sarasota/Bradenton and Naples areas right now. I can't speak to the East Coast at the moment because I have not been there for a few years.
Some foreclosures in Lakewood Ranch are closing at 30% off their 2003 prices. Other parts of Florida are back to mid 90s prices.
If you are looking to protect some cash and the idea of living in florida ( at least half the year) is appealing, now may be the time to look into your
options.
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Last Updated ( Friday, 30 January 2009 )
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