What is Asset Protection?
What is Asset Protection?
Asset protection refers to certain methods that one can employ in order to secure their property against creditors, government seizures, and private lawsuits. Asset protection is a broad field that involves many different laws, including real estate, insurance, and tax laws. Protecting assets requires much planning and some knowledge of the various laws that affect property ownership.
In many cases, asset protection only becomes an issue if a person is in debt. A creditor may seek to claim some of the debtor’s property in order to make up for the debt or missed payments.
How Can I Protect My Assets?
As mentioned, asset protection can be a complicated endeavor that involves many steps. Anytime property is purchased or obtained, there are things the owner can do to increase their security and ensure that they remain the owner in the years to come. Some of these acts include:
- Use a written contract: Disputes over ownership can be avoided by using a contract for sales transactions. This provides a record of the sales and exchange terms for future reference.
- Buy insurance: Some property like cars, houses, and other items can be backed by insurance. This will help the owner replace the product or recover some of the cost in case the property gets damaged, lost, or stolen. Property insurance and title insurance are a few common types of insurance to look into.
- Avoid debt: Losing assets often results from having debt. Avoid missing payments on homes, mortgages, cars, and other major purchases. This will help you avoid having a property lien placed on the item
Lastly, you should also understand some basic tax reporting laws, especially those involving exempt and non-exempt property. Categorizing property as exempt can have different asset protection results than if it were non-exempt.
What if I Have a Dispute Over Asset Protection Issues?
One of the main disputes related to asset protection is the seizure of property by a creditor or lending institution. Oftentimes, a person who has defaulted on credit or loan payments may have their property subjected to a lien, then seized by the creditor in lieu of the payment. This can happen through a court proceeding in which the judge authorizes the lien.
These can sometimes be avoided through a re-negotiation of the loan contract terms and a re-working of the payment methods. This is dependent on each individual loan arrangement and the willingness of each party to cooperate.
Do I Need a Lawyer for Help with Asset Protection Matters?
Understanding how asset protection works is no easy task. It’s in your best interest to hire a lawyer if you have any questions or concerns involving the protection and security of your assets. Your attorney can provide you with the most up-to-date legal advice based on the unique laws in your state. Also, your lawyer can provide you with legal representation in court in the event that litigation becomes necessary for a dispute.
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Last Modified: 01-28-2014 02:55 PM PST
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