“Asset protection” is a joke. If asset protection really worked, everyone would do it. And then, no one would ever have to pay their debts. The only person helped by an asset protection plan is the promoter.
According to Forbes Magazine, ” it [asset protection] is not just about protecting assets but also about making sure that one does not end up in jail for contempt or bankruptcy fraud for engaging in the process.
If you think about it, the concept of hiding assets from creditors is silly. If you are already in debt, the best way to protect your assets from creditors is to resolve your debts. Resolving your debt means facing up to the debts and paying them, or else settling for an agreed amount, or discharging your debts in bankruptcy. Tricks don’t work. Here’s a few reasons why.
Asset protection schemes are scams.
Some so-called “asset protection” lawyers will advise people to set up various trusts, corporate shells, and similar financial entities. Asset protection promoters make their money by taking fees from you to set up the entity.
You already know that creditors can go after your assets, right? Well, hopefully you can guess what I’m about to say next. Your new entity is also an asset as soon as it is created, and your creditors can go after it.
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I’ll admit it is extra trouble for creditors to pursue and recover asset transfers. But they can do it, and collection lawyers know how to attach those transferred assets and pop your asset protection scheme.
Fraudulent transfers and asset protection schemes
Transferring an asset to someone else or to an entity owned by someone else likewise does no good. That is because the transfer of your asset is a fraudulent transfer. Even the transfer to an entity that belongs to you might be a fraudulent transfer.
Creditors have the power to set aside a fraudulent transfer. There is nothing new here. Creditors have been successfully setting aside fraudulent transfers for thousands of years.
Fraudulent transfers and bankruptcy
Your next problem is that fraudulent transfers can be used to deny you a bankruptcy discharge. If you have severe debt problems, it behoves you to consider bankruptcy. Maybe you should talk with some local, experienced bankruptcy lawyers for direct, person to person advice. Most people who file bankruptcy don’t lose any assets. You need a professional assessment to find out what your legal rights really are.
You obviously want legal advice. The information posted here can give you some direction, but is a poor substitute for the debt relief advice you will get in person from one or more experienced lawyers.
Stop beating your head against a wall, and see a lawyer. Like I said, tricks don’t work. If they did work, everybody would use them, and nobody would ever have to pay for anything.