Protecting home or Property after bankruptcy

[Mi Bankruptcy]

As I have had an eye opening experience during my bankruptcy I want to know if there is a way to protect property in the future.

As an example,

I am 36. If I pay off my home in the next 20 years. How can I protect it from things like medical debt that could force me into bankruptcy again? I have been sick on and off my whole life. Is there a way to accomplish this. I have seen homes placed in trust ( waterfront property)? Is this the reason they do this?

[DeadManCrawling]

Some types of trusts can be used to protect property, some cannot. To muddle matters, it also depends on underlying state law and how it intersects with federal law. Further, it can be district specific where BK filings are concerned.

Asset protection is a very good idea, and working decades in advance is the only good choice. Since anything done in recent years can be avoided by BK trustees and judges in courts, you have to work that far in advance. But it sounds like you have some experience with this.

I would hire a local asset protection attorney, after researching as much as you can online.

Some states offer Tenancy By Entireties protection to married couples. This can be very powerful, but only if debts are held in one name and the property is titled, at time of purchase, as TbE property. Otherwise it gets murky and hard to defend. Also varies by state and district as to how it is interpreted.

For estate planning purposes, Ladybird deeds are very good instruments, but are only available in a few states.

Good luck, you are working on something all recent BK filers should be concerned with, immediately after discharge.

[BCA2009]

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[StartingOver08]

DMC has hit the nail on the head. The only little bit I would add is the reason you want to do your asset protection right away after BK is because you have no creditors you are trying to avoid so there would be no issue regarding fraudent transfers. Here is a link to a pretty good definition of timing and asset protection http://www.assetprotectionbook.com/

[OHBOY]

Thinking of moving (?)...lol. Texas and Florida have excellent homestead exemptions........

[DeadManCrawling]

OHBOY has an excellent point, really.

Before filing, we rounded up all of our assets among us and my father in law and converted everything we could into a home that falls below the exemption amount. Needed a bit of work, but we got half an acre in the country with plenty of room for garden, smokehouse, firepit, koi pond and 2200 sq feet of terraces and paver stone walkways. Very private, and we are working to become as self-sustaining as possible. It will take some time, perhaps a few years to totally realize the potential.

But there is no mortgage, the place was relatively inexpensive- $105k. Three years ago, someone had it mortgaged for $300k.

Now, awaiting discharge, we are preparing to plan for the future, and Florida's unlimited homestead exemption is a big part of the plan. We will never owe anyone again. We will never mortgage this or any other property, and will never have lines of credit. We may have one credit card for emergency plane tickets and such, but will never be slave to the lenders again.

Our situation was unique, more unique than most, in that we were able to purchase outright a homestead immediately prior to filing BK. It allows us to plan for the future and be ready in case things get worse for the country as a whole. Not everyone will have this kind of chance, but everyone DOES have SOMETHING they can do to prepare themselves for the future, in terms of asset protection and thwarting future creditors legally, far in advance of any possible problems.

Anyone who has emerged from BK should really be giving this a lot of thought. I never imagined, like many people, that I would ever file BK in the first place. Now that I have, preparing for the (hopefully small) chance of financial disaster occurring again is common sense.

Best,

-dmc

[HHM]

You also have to weigh the cost benefit. Some asset protection options can be relatively expensive to maintain.

[keepmine]

This is something my wife and I have kicked around from time to time.
In general, we intend to eventually move to a state with a generous homestead exemption that offers TBE protection.
Presently, we're socking as much as we can afford into 401K's as well as IRA's.
When we retire, we also intend to carry medicare supplemental insurance.

As I get the time, I'm going to start doing more and more research on asset protection.
Frankly, I've no fear of excessive cc debt. Been there and done that and learned my lesson. My biggest fear is catastrophic medical expenses that aren't covered by insurance striking me or my wife after we retire.
This has the makings of a good thread/topic. Hope others contribute with some ideas.

[keepmine]

Looks like TBE protection extends to bank accounts in Fl.

http://www.assetprotectionfl.com/2008/11/careless-paperwork-can-forfeit-tenants-by-entireties-protection.html

Home > Florida Protections > Careless Paperwork Can Forfeit Tenants By Entireties Protection
Posted on November 11, 2008 by Jonathan Alper
Careless Paperwork Can Forfeit Tenants By Entireties Protection
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Another attorney told me about a hearing where his client, a judgment debtor, lost $4,000 he had held in a tenants by entireties account because the debtor failed to verify all the documents which were signed when he and his wife opened the bank account. The debtor and his wife together went to their bank to open a tenants by entireties checking account . They signed bank forms. Subsequently, they received written bank statements which were titled as husband and wife, tenants by entireties. A judgment was entered against the husband. The husband's judgment creditor garnished the joint account, and the creditor issued a subpoena of all bank records regarding the account. The debtor's attorney filed a motion to dissolve the writ of garnishment on the grounds that it was clearly titled as a tenants by entireties account. The court denied the motion and sustained the creditor's writ of garnishment.




At the court hearing on the motion to dissolve the writ the judgment creditor produced the debtor's bank signature card which had boxes to be checked corresponding to different forms of account ownership. On the signature card the only box checked was that for "joint tenants with rights of survivorship." There was a box for "tenants by entireties", but that box was not checked. The creditor argued that the debtors intended account ownership with survivorship, but not as tenants by entireties, because they chose to check the survivorship box in leave unchecked the entireties box. The debtor's attorney argued that regardless of what box had been checked the bank account was titled as "tenants by entireties" and that the actual title take precedence over what appears on the account application.

The court held that the account was not a tenants by entireties account because the debtors intended to open an account with rights of survivorship based on what they checked on the account application. In my opinion, the debtors' intent is ambiguous. The Florida Supreme Court has ruled that where the ownership of joint marital accounts is unclear the law presumes that married couples' financial accounts, and other personal property, is owned tenants by the entireties. The debtor's attorney is considering an appeal. The small amount of money at stake may prevent this case from being resolved by an appellate court.

This story illustrates how important it is for married couples to pay attention to details when they open financial accounts which they intend to be tenants by entireties accounts.

[DeadManCrawling]

Yes, Florida honors the TbE exemption for all property, I believe. It is simply a matter of titling the property, account, or asset properly from the time of acquisition.

This is a very powerful, and relatively unknown, method for very good protection. It is only available to married couples, and dissolves with divorce or death, so it is not total protection in that sense. But it is good to be aware of this protection.

A few other states allow it, but not all do.