In case you are assembly with an asset safety lawyer, and he’s advising you to switch varied belongings and properties into an llc, or into some form of belief, you then’re in all probability not a superb candidate for chapter anyhow. You want a unique form of lawyer for a unique form of case.
In chapter, I can shield varied belongings below state exemptions that exempt (shield) your belongings. As an example, below Utah legislation, we will shield $3,000 of the fairness in your automobile from collectors, 100% of your meals storage, and $45,100 of your property’s fairness below the Utah Homestead Exemption. However, and it is a massive BUT, I can solely shield property that has your title on it.
So when you switch the house out of your title and into an llc, the llc can’t declare any form of exemption within the worth of your property. And when you personal the llc, you then now personal an llc that owns a house with no homestead exemption.
And now you’re considering, “however what if I switch the property into an llc that’s owned by another person?” Properly, it is a fraudulent switch. A “fraudulent switch” is whenever you switch possession of one thing for lower than honest worth. So when you give your property to an llc in your good friend’s title, and also you obtain no honest compensation, that matches the definition. The bk trustee can then “keep away from” that switch and put the property again in your title. Nonetheless, since your title wasn’t on it whenever you filed the case, you can not declare the homestead exemption.
Both manner, you shot your self within the foot to the tune of $45,100 of fairness that you might have protected when you saved the house in your title. The trustee may wish to promote your property to money out that fairness.
Simply yesterday, I had a possible consumer name who had about $300,000 of fairness in his dwelling. He additionally had at the very least $200,000 of offended collectors threatening to sue him. Due to the fairness in his dwelling, he transferred it to an llc he had simply created, and recorded the switch with the Salt Lake County Recorder. He did this on Monday after which known as me on Tuesday. When he known as me, he was feeling fairly happy with himself.
I informed him that I couldn’t assist him. The potential fairness situation in his dwelling was dangerous sufficient, however whenever you throw in fraud, that’s not my form of case.
If you wish to shield your belongings, you need to speak to an lawyer earlier than you do something as drastic as transferring possession to somebody or one thing else.