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04-14-2008, 08:42 AM
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Senior Member
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Join Date: Dec 2006
Location: central oregon coast
208 posts, read 232,836 times
Reputation: 126
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Urban Legend?
Have wealthy girlfriend who is always telling me to keep a small mortgage on house so it can not be taken in a lawsuit.This is an urban legend idea,right?
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04-14-2008, 09:04 AM
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Saepe errans, num quans hesitans
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Join Date: Sep 2006
Location: NW Las Vegas - Lone Mountain
9,937 posts, read 8,840,452 times
Reputation: 1308
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Quote:
Originally Posted by nocoldiron
Have wealthy girlfriend who is always telling me to keep a small mortgage on house so it can not be taken in a lawsuit.This is an urban legend idea,right?
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Pretty much. There is a thing called homestead that prevents seizing some part of a home in a legal action. In Florida it is pretty much the whole house. Not everywhere though. |
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04-14-2008, 07:08 PM
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Senior Member
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Join Date: Nov 2007
Location: Imaginary Figment
5,543 posts, read 1,771,022 times
Reputation: 1631
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You can always start an LLC and put a lien against your own house. Putting anybody else second.
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04-14-2008, 07:10 PM
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Member
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Join Date: Feb 2008
Location: Hilltop
99 posts, read 113,630 times
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Florida is the best state that's why people that owe 10 million to many creditors tie up all their cash in a very expensive house with little worry about creditors ever being able to seize it...other states you can Homestead which protects a certain amount of equity,but all in all it is difficult to lose your home to lawsuits,you may still have to pay the judgement but they are generally blocked from forcing you to sell,they generally can only collect when you actually do sell or try to refinance....if she is wealthy then chances are she has been sued in America so her advice actually is good...but the best protection is to not own the house at all,put it in a trust or LLc and control it from a distance...
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04-14-2008, 07:17 PM
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Competition breeds winners
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Join Date: Sep 2007
16,665 posts, read 5,854,353 times
Reputation: 1698
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Quote:
Originally Posted by nocoldiron
Have wealthy girlfriend who is always telling me to keep a small mortgage on house so it can not be taken in a lawsuit.This is an urban legend idea,right?
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What you stated, by itself is wrong.. if you want to keep your house judgment proof, the rules vary state by state.
Overall though, keeping a judgment on a home does offer some protection from a lawsuit, but if you want to keep it from being taken, you keep a large mortgage on it, not a small one.
With a small mortgage, nothing keeps a creditor from forcing a sheriff sale. |
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04-14-2008, 07:19 PM
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Senior Member
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Join Date: Feb 2008
798 posts, read 566,464 times
Reputation: 445
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Someone can double check me on this but I think if you keep your home in trust it can't be taken in a lawsuit.
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04-14-2008, 07:22 PM
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Competition breeds winners
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Join Date: Sep 2007
16,665 posts, read 5,854,353 times
Reputation: 1698
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Quote:
Originally Posted by Rose Red
Someone can double check me on this but I think if you keep your home in trust it can't be taken in a lawsuit.
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That depends on if the creditor can find out who owns the trust or not. If your a creditor of the trust, any lawsuit becomes a judgment, and judgments can mean forclosure against assets... Finding your assets is the key. |
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