Are your personal assets at risk of being seized or repossessed by other parties?
Perhaps you took out a personal loan and secured it against your house or car title. Or you owe back taxes and the Internal Revenue Service is threatening to seize your assets.
Regardless of your specific situation, one thing is clear: you don’t want to lose your assets.
But pulling this off can be difficult, especially if the other party has a warrant for the repossession or seizure.
Worry not, though. Help is on the way to reduce your risk of repossession due to a lawsuit!
Here’s how to protect your assets from lawsuits.
Stop Putting Your Assets on the Line
An effective way to protect your assets from lawsuits is to stop putting them in the line of risk.
In most cases, no one will come for your personal assets if they aren’t attached to some kind of debt. For example, if you take out an unsecured personal loan, it means the lender is satisfied that you have sufficient income to repay the loan. If you default on the loan, they have no right to come for any of your valuable assets.
However, if you take out a secured personal loan, such as a home line of credit, the lender has every right to initiate repossession proceedings if you fail to pay up what you owe.
In short, avoid taking out secured loans unless you’re sure you won’t default on the loan.
Form a Limited Liability Company or a Corporation
When you start a small business, you will likely want it to be a sole proprietorship. After all, this business structure doesn’t need any complex paperwork.
Although sole proprietorships (and general partnerships) have their own advantages, they leave you exposed to liability. If your business takes out a loan and defaults, for instance, nothing stops the lender from coming after your personal assets.
This is why it’s advisable to register a limited liability company or a corporation when you’re starting a small business. Under this structure, your personal liability is limited. Creditors can only sue your company and go after its assets since under the law, an LLC or a corporation is a legal person.
Create a Trust
You’ve probably heard tales of rich people using trusts to store their wealth and evade taxes.
When you want to protect your assets from lawsuits, don’t shy away from creating a trust. An irrevocable asset protection trust is usually a watertight way to keep your assets off legal judgments.
However, creating a trust is a big decision. Although you’ll be able to flesh out the terms of the trust, you’ll generally lose direct control of your own assets. Be sure to consult an attorney before making the decision.
Also, consider investing in the services of an Orange County estate planning lawyer to further protect your assets from taxes and lawsuits.
Know Your Consumer Rights
Sometimes people lose their assets simply because they don’t know their legal rights.
There are federal and state consumer protection laws that regulate how a lender can seize a borrower’s property. Your consumer rights can protect from a debt lawsuit.
If you don’t know your rights or you’re facing a debt lawsuit, it’s advisable to hire a debt attorney.
These professionals will try all they can to repulse any lawsuit coming your way, and in the process protect your assets. So don't delay any further, hire an asset protection lawyer right now.
That’s How to Protect Your Assets from Lawsuits
You worked hard for your assets. You certainly don’t want to lose them against your will. With this legal guide on how to protect your assets from lawsuits, you now know the steps you can take to ensure your assets remain yours. Lower your liability and reduce your risks!
