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  • Gavin West
    replied
    For someone who already has a known creditor, the homestead exemption is likely a much stronger defense, especially if the person owned the home before becoming a debtor. All large purchases afterward would likely be scrutinized and could perhaps be reversed. It depends on the case law of the state or federal bankruptcy law, and on the judge's own personal preference, so favorable case law is no guarantee. If this is not a hypothetical, the person needs to get counsel from a local competent attorney. If the fee was more than the homestead exemption, I probably wouldn't recommend the strategy unless medical needs (which hadn't already been put off for years) just happened to clearly require it. If I had a known creditor and a very valuable home, besides talking with a good collections lawyer, I'd think about selling the home, buying a modest home (or even mobile home not worth a huge amount above the homestead exemption, depending on how aggressive the creditor is), eating out at quite a few nice restaurants, going on a fun but not totally extravagant vacation, and giving the lawyer a large advance deposit (he'd have extra incentive to stay on the ball).

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  • Tim
    replied
    Fraud might be too strong of a word. In bankruptcy a clawback might be possible. The judge might come to the conclusion your intent was not allowed. Not an attorney.

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  • G
    replied
    Originally posted by billy View Post
    Also, the better asset protections occur before needed, not after the judicial process has started.
    Absolutely. But for the record--at least in my state--you can actually declare a homestead to shield yourself even when the poo is hitting the fan. From my understanding, this is unique in asset protection tricks.

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  • billy
    replied
    Also, the better asset protections occur before needed, not after the judicial process has started.

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  • G
    replied
    Originally posted by rdhoppe View Post
    Would the payment of a large retirement community nonrefundable entrance fee work to prevent a person's creditors from recovering the amount paid as the entrance fee? My thought is that it shouldn't be a fraudulent transfer because it is for value received. If this works, someone facing a potential large judgment against him could
    sell his home first and use a large part of the proceeds to pay the nonrefundable entrance fee.
    Does your state have a homestead protection? My protection would be far more than any kind of entrance fee that I would pay.

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  • rdhoppe
    started a topic Asset Protection

    Asset Protection

    Would the payment of a large retirement community nonrefundable entrance fee work to prevent a person's creditors from recovering the amount paid as the entrance fee? My thought is that it shouldn't be a fraudulent transfer because it is for value received. If this works, someone facing a potential large judgment against him could
    sell his home first and use a large part of the proceeds to pay the nonrefundable entrance fee.
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