In the event that you’re facing foreclosure, it’s important you take the necessary steps to safeguard your assets. If you can’t satisfy your debt fully, creditors might seek a deficiency judgment against you that will result in liens being placed on your property. Fortunately, there are many different options available to you to prevent the seizure of your personal assets during a foreclosure.
Different Options to Safeguard Your Assets
Here are some viable asset protection options you can consider to safeguard from personal assets from being seized during foreclosure:
Establish a trust fund. Certain types of trust funds can safeguard your personal assets so that you can pass them on to your beneficiaries, like your kids or grandkids for instance. Although creating a trust fund could be costly and time-consuming, it could offer you better protection than all the other available options.
Set up new exempt accounts. If you don’t already have exempt accounts such as a 401k or IRA, now would be a good time to start. Aside from protecting your assets from foreclosure, investing in exempt accounts like these will also go a long way towards securing you and your family’s financial future.
Invest more in exempt investments. It’s vital that you research the state rules regarding which accounts are exempt and which are not. Instead of buying an expensive car or a second house, consider increasing the amount you invest in your exempt accounts.
Establish an LLC or limited liability company. While this might seem counterintuitive, starting a company prior to foreclosure might help safeguard your assets from creditors by placing them under the company name, considering that it’s not a partnership or sole proprietorship.
Consider opening an offshore account. If you’re interested in going this route, make certain that you’re in complete compliance with the United States Patriotic Act laws concerning transferring money out of the U.S. Otherwise, you might find yourself in a whole lot of trouble.
Consider filing for bankruptcy. It is important to note though that if you plan on filing for bankruptcy, state rules will dictate which specific assets you get to keep and which ones will be subject to liquidation to repay your debt. With that said, learn which assets are exempt in your state to figure out if filing for bankruptcy is a wise option or not.
Act As Soon As Possible
Do your homework and research foreclosure laws in your state. The sooner you act, ideally prior to the foreclosure proceedings, the more likely you’ll get to protect and keep more of your assets. Failing to legally protect your assets might get you in legal trouble and attempting to hide your assets might result in you getting charged with a fraudulent transfer.
Put simply, to ensure that you safeguard your personal assets when you are facing a foreclosure, you need to choose the most suitable options relevant to your specific circumstances to ensure the best possible results for you. It also doesn’t hurt to seek help from a professional to make certain that you won’t get in trouble with the law.
