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Discouraging Lawsuits

Here are a few (of many) techniques to diminish the likelihood of getting sued:

  • Have a publicly recorded large mortgage and liens on any real property.
  • Get a large line of credit and keep your estate encumbered.
  • Keep mortgages against property at all times.
  • Periodically refinance mortgages to strip equity.
  • Have standby second and third mortgages.
  • Encumber everything you own. Any asset can be security for a loan.
  • Lien second homes, investment properties, stocks, bonds, art, jewelry, collectibles, business ownership, retirement accounts.

Many asset-based lenders lend money and lien assets as collateral. Besides banks that provide home equity lines and refinance existing mortgages, a long list of other lenders refinance businesses, autos, equipment, boats and other property. It is possible to borrow and pledge as collateral any asset to virtually any lender.

With good credit it is possible to borrow approximately 80% of the value of assets from traditional banks and finance companies. With less than excellent credit it is still possible to find hard money lenders that may charge more interest but the small cost of additional financing fees is much less than the loss of principal and key assets in a lawsuit.

The Presser Law Firm, P.A. has successfully engineered hundreds of transactions that have provided our clients ultimate protection from lawsuits and creditors—in some cases for clients that had little or no credit. Using debt shielding, third party guarantees, back-to-back loans and other techniques we can obtain loans from international lenders and encumber assets and estates worth many millions of dollars through sophisticated insurance/financing arrangements.

Because a close relative is a legally distinct party it is possible to use family members as a vehicle for a lien or security interests provided that fair consideration was given for the loan. That being said, a loan from a family member or an affiliated party could make a fraudulent transfer claim more likely because insider loans are more closely scrutinized. If a court was to determine that a transaction was devoid of fair consideration, it could cancel the mortgage and expose assets to creditors.

Using common law property statures a spouse can encumber their separately owned property in certain states. Community property states allow property owned and held separately to be granted as security to a spouse. Although one spouse may legally encumber the other's assets, state fraudulent transfer laws frequently void such loans granted after a claim was made by a creditor. An affiliated business can lien personal property; but, this lien will also less likely be upheld by the courts if you own or control that business.

No rule, law or legal principle prevents an individual from forming a corporation, limited partnership, or LLC and granting that entity a mortgage or security interest against any owned assets. Even though this type of security interest could be challenged in a court of law, a public records asset search would not likely reveal the relationship between the entity and the individual. A friendly lien held by an entity directly or indirectly controlled by an individual can provide limited protection by shifting the strategy of a plaintiff in their collection effort and experienced Asset Protection specialists use a variety of creative planning techniques to reduce the visibility of their clients' ownership in a lender entity.

The key to optimized Asset Protection is professional guidance. The use of several levels of customized international trusts, corporations, LLCs, charitable organizations, private foundations, and other entities can provide multi-dimensional anonymity and protection.

International entities can be difficult for a plaintiff to distinguish between an operating and shell company and are highly dependent on the privacy provisions of the country of their formation. If using an international entity as an asset shield it is important to form the relationship between the entity and its U.S. connections in such a way that it can be properly defended in a U.S. court of law. The key to using an offshore entity—or a friend or relative—is to always be able to document fair value for the lien and an enforceable debt. With these proof points and a carefully designed strategy it is possible to discourage lawsuits and protect your assets.


The best defense is a good offense.