Attorney-Client Privilege & You: How to Talk to Your Lawyer

 "So then I says to the guy, 'leave the gun, take the Canolli."

Yes, we've all seen that movie. When it comes to going over your business plans and tax structure with your lawyer, you need to understand what is privileged and what is not. Knowing the difference will help your lawyer just as much as it will help you.
We've all "left the gun and took the Canolli" at least once in our lives, right? Or more likely, something less extreme but nonetheless unflattering. The point is, you don't want to that client who tells crucial information to his or her lawyer and then ends up wondering whether that information is “attorney client privileged” or not.

What is Attorney-Client Privilege?

Attorney client privilege is a fundamental legal protection offered to individuals, companies, and organizations who provide confidential information and who seek counsel from their lawyer or law firm.
Under law, an attorney cannot be required to provide attorney client privileged information to a plaintiff in a law suit, such as a creditor, or to a government agency (our friends at the IRS) except in certain scenarios.
Below are a couple of common situations where you may lose attorney client privileges and a few tips on how to make sure your confidential information which you provided to your lawyers doesn’t run into the exceptions.

Exceptions to the Attorney-Client Privilege Rules

Third Party Exception: Anyone But Your Lawyer Being Present Waives Privilege.

Was a third party present with your lawyer when the information you wanted to be privileged was discussed? For example, was your accountant or financial adviser present when discussing information you wanted to remain confidential and to remain privileged?
Keep in mind that if a third party is present in a meeting or on a conference call, then that third party may be required to provide information or documents from the meeting. That person can’t raise the attorney-client privileged defense for you unless they are actually your attorney.
If a third party professional does need to be hired, such as an accountant, that third party can be hired or brought into the matter by the attorney and the privilege may remain intact.
Fun fact: This is known as a “Kovel” hiring of the accountant and comes from a landmark case where a lawyer got an accountant for a  client and the accountants work was covered under the lawyer’s attorney client privilege.
TIP: For sensitive matters where you want information to remain confidential and privileged, do not involve outside parties as those outside parties or non attorney advisers cannot raise the attorney client privileged defense.

Only Legal Advice Is Attorney Client Privileged.

This is especially tricky for companies who have their own “in house” legal counsel who also offers business advice.
Only the information exchanged that pertains to legal advice would be privileged. For example, was an organization chart of the companies holdings “privileged” when provided to the company lawyer also manages those assets for the business?
Also, what if that lawyer shared that organization chart to accountants, property managers, or other non lawyers? If they did, then that information is no longer attorney-client privileged.
TIP: If you have sensitive documents or information you want to keep in communication only with your lawyer, ask your attorney to identify the document as “Attorney Client Privileged” and do not provide it to non lawyers.
Not all information with your lawyer needs to be attorney client privileged. But keep these tips in mind when communicating sensitive information to your attorney.
You should always let your attorney know before you provide the confidential information that you intend it to be privileged. This way your lawyer can make sure that your information is properly "handled."
If you still have questions about attorney-client privilege, contact us directly. Or as always, you can leave them in the comments section below.

Most Real Estate Investors Don't Need To Pay For A Registered Agent

If you don't own an LLC yet and you plan on getting one, read this first.

You may or may not know that you're required to have a registered agent in every state where your LLC does business, including the state you formed your LLC in. Each state has different rules when it comes to who can and can't be a registered agent.

The purpose of a registered agent is to receive and process government notices and file annual reports. As I said, every state has their own rules about registered agents. But there are 3 rules that you can find in almost every state:

  1. The Registered Agent must be a resident of the state he or she plans on being a registered agent.
  2. The Registered Agent must have a physical address in the state. (Meaning you can't use a PO box.)
  3. The Registered Agent must be available during “normal” business hours. (As in from 8 to 5 Monday through Friday.)

A registered agent is a permanent requirement. You're required to have one as long as your business continues to operate.

What Happens if I Don't Get a Registered Agent?

Your business could be administratively dissolved (they'll revoke your license) and lose it's ability to do business in a state. Furthermore, you will lose your legal protections and be vulnerable to lawsuits. But where they really stick it to you is the reinstatement process.

The reinstatement process can take several months to a year in some states. Then there's the fees, which can get expensive depending on what state we're talking about.

Should I Be My Own Registered Agent?

That depends.
I'm going to assume you're a real estate investor. If you only own properties in your home state (your state of residence) I wouldn't bother getting an agent. But if you have privacy concerns, then you may want to get one. Otherwise save your money and be your own registered agent.

Learn more about being successful as a real estate investor. Or better yet, contact us to discuss your individual situation. And yes, we can serve as your registered agent in many cases.

💸 2 Ways Real Estate Investors Lose Money

Believe it or not, as a real estate investor you can only lose money in two ways.

Think about it. Either you make a bad investment, or someone sues you and takes your hard-earned money. Other then that, you've got nothing to worry about!

As an attorney, and someone who used to sue people, I can honestly say that lawsuits are basically just legalized stealing. Although, sometimes lawsuits are for a good purpose. But usually they're not, especially in the real estate industry.

How Do I Protect my Money & Real Estate?

So remember, getting sued is one of two ways you can lose money as a real estate investor. This means one of the key things we have to do to guard against half of the way we can lose our money in real estate investing is to protect ourselves specifically from lawsuits.

You're able to protect yourself from lawsuits by using an asset protection strategy. An asset protection strategy protects you from lawsuits and anybody looking to try to sue you. It makes suing you a gamble.

But here's a question. Why do real estate investors, or anyone else for that matter, get sued?

Real Estate Investors Are Sued for Their Success

Basically, you get sued because you have money. Someone else will always want your money. If you didn't have any money (or real estate assets that represent money), nobody would waste their time trying to sue you. So the question becomes, "how do I make it look as if I own nothing?"

You do that by using an LLC structure. You put your assets in an LLC, which is then owned by an anonymous trust. Nobody will be able to trace your assets back to you, meaning nobody will be able to sue you.

Another way to protect your money from lawsuits is by creating a series of fortresses (LLC's) to put your assets in. What we do is make each LLC appear low value and difficult to penetrate during a lawsuit. So even if they do penetrate it, they'll get nothing.

Suing you will be seen a gamble. And guess what?

Attorneys Don't Like Gambling on Protected Real Estate Investors

What an asset protection strategy does is make an attorney feel like suing you is the equivalent of going to Las Vegas to gamble. Suing you is usually a gamble for an attorney anyway, since most attorneys take cases on contingency (they don't get paid unless they win.)

Since most attorneys take their cases on contingency, they're playing to win. So there's no way they'll take a case they think they can't win or isn't worth their time.

At Royal Legal Solutions, we make it a gamble for attorneys to come after your money and your real estate investments. And remember, lawsuits are a business. By making it a gamble to sue you, the reality is it won't make business sense to try suing you. They just won't try it.

Lawsuits Are A Money Driven Business: What Real Estate Investors Should Know

 The title of this post says it all. As a real estate investor, you have to understand: lawsuits are a business. When someone wants to sue you, they are only looking for money. To be specific, your money.

How Do I Protect My Real Estate Investments?

You get a proper asset protection strategy.

A proper asset protection strategy keeps people from finding out what you own, and if they ever were to sue you, it limits what they can take. But more importantly, a proper asset protection strategy exhausts their will and their resources to fight you.

This keeps people from continuing with the lawsuit. It usually gets them to settle early and for less. It even gets them, in most cases, to stop the lawsuit before it starts.

What you have to understand is that, because lawsuits are a business, the main question people who want to sue you are wondering is: how do we get money out of somebody when we use them?

This question is answered with a proper asset protection strategy. And you better believe it's the correct one!

How a Proper Asset Protection Strategy Defends Your Assets

A proper asset protection strategy protects your assets from being seized by somebody via a judgement. It makes people (attorneys) believe they’re not going to get anything out of their investment in a lawsuit. This is extremely important.

Because, you see, lawsuits are only paid for in two ways: someone either has to pay an attorney to sue you or an attorney can take a case on contingency. (Attorneys usually take cases like these on contingency.)

Let’s say I’m an attorney who wants to sue you. While researching you, I find out that you have no assets. My research tells me you’ve qualified for food stamps for the past five years.

How much money do you think I’m willing to risk for a judgement which is merely a piece of paper? Without an asset to seize, a judgement is worthless.

Moreover, there’s no attorney worth their salt who’s ever going to take a case like that on contingency. When an attorney takes a case on contingency, that attorney is risking everything. Clients lose nothing.

Attorneys only take cases that they’re very confident they can win and collect on. So when you ask yourself, how do I protect myself from a lawsuit? What you should really be asking yourself is, how do I make it look as if I don’t own anything?

Remember: Lawsuits Are a Business

Well, that’s everything. If you have any questions feel free to ask me in the comments below, I’d be happy to answer  them! Feel free to continue our discussion on this topic or share any of your thoughts on asset protection.

Your Insurance Company Won't Help You Protect Your Assets

We’ve been trained to believe insurance companies are there to watch our back. The reality is that your insurance provider is a company, just like Nike or McDonalds. They exist because they make more money than they spend.

These insurance companies are more than happy to take your money as long as things are going well. You would never have any reason to doubt their protection until you decide to file a claim...and get dropped! 

Have you ever noticed how people start suing insurance companies every time a natural disaster happens? Why do you think that is?

Now of course, you should have insurance and you should file claims. This is going to work out fine most of the time. But the reality of the situation is that when you file a big claim, they are going to take a second look and see if they can wiggle out of their responsibility to cover you (see our landlord FAQ article for more on this).

You may just find yourself suing your insurance company like the folks after disasters.

Your Insurance Company Won't Protect Your Assets

While everything's fine, your insurance company will take your money. Yet as soon as something happens and you decide to file a claim, you get dropped. The reality of the situation is, if you have a big claim you'll end up having to sue your insurance company just to get them to pay out.

As an investor you shouldn't rely on filing a claim with your insurance company to protect your assets. Sure, they're possibly going to cover the $5,000 slip and fall case that happened on your icy front porch.

But what they won't cover is where the real story is here. Here's an example of a claim that only an asset protection plan will help. Imagine telling your insurance company that grandma fell through the staircase, broke her hip, and now will be permanently disabled for the rest of her life. You'd almost certainly be unceremoniously dropped.

Don't expect their empathy, either. Instead, they're going to say it was your fault grandma fell through the staircase because you should've known there was something wrong. They'll say your claim is a case of "gross negligence", which is your fault and thus outside of your policy limits.

Your insurance company knows they can do this. The fact is, they have millions of dollars to spend on their legal team, whereas most investors only have a few thousand dollars to spend on ONE attorney.

Protect Your Assets By Being Proactive

Instead of relying on your insurance company to protect your assets, be proactive. You worked hard to get to where you are now, don't lose what you've built.

What you need to do is protect your assets with a proper asset protection strategy, incorporating anonymous trusts and LLCs/Series LLCs to keep people from coming after your money. These legal structures will stop lawsuits before they happen.

Asset protection involves making your ownership anonymous, as well as legally limiting your liability. People won't sue you if they think you have nothing worth taking. They certainly won't be able to sue you if they don't know what you own. Doesn't that sound a lot better than filing a claim? Learn more about basic asset protection strategy from the many articles here on the Royal Legal Solutions website.

If you have any questions, just comment below and I'll answer them as soon as I can. If you're not willing to risk everything you've earned on the futile hope that insurance will protect you, schedule your asset protection consultation today.

How My Client's Asset Protection Strategy Saved Her From Being Sued

On my blog I've gone over countless ways to protect yourself using an asset protection strategy. But what I haven't done is shown you real-life examples of how asset protection can benefit you, until now.

Get Information From Real Asset Protection Experts

There's a lot of bad information out there about how to protect your real estate investments. You may have seen YouTube videos or read forum posts from people who claim to be experts. T

he thing about the internet is, anyone can claim to be an expert. Even if they've just read a single Wikipedia article on the subject.

You may have even received bad advice from your CPA or an attorney who's a general practitioner in the field. These people will tell you real estate insurance is enough to protect you. But the fact is they don't know. Their advice isn't just wrong, it's dangerous.

Insurance covers things like negligence or a slip and fall in a house. It doesn't cover a lifetime of fraud or breaches of contract. You may think "hey I'm an honest person, I don't need to worry about lawsuits."

But that's not why lawsuits happen.

Understand Why Lawsuits Happen

The majority of lawsuits happen because of a misunderstanding. Take for example a client of mine. She recently bought a house and renovated it. During her renovations she put in some new plumbing because she thought it would add more value to the house.

asset protection case study

Then she went ahead and told the person buying the house how she re-did the plumbing. So they sent her an email asking what plumbing she replaced. She responded, "Well, I re-did all the plumbing in the house."

So they bought the house from her. Some months after the sale there was a leak that caused tens of thousands of dollars worth of damage. The people who bought the house from her threatened a lawsuit based upon her email that said she replaced all of the plumbing in the house.

Now, this seems to be a simple misunderstanding of what she meant in her email, but that was the basis of this lawsuit. I'd like to point out that this is actually a case of intentional fraud, which isn't something an insurance policy would ever cover.

My Client's Asset Protection Strategy Saved Her Thousands

Luckily, my client had the foresight to put in place a proper asset protection strategy, including a series LLC with an Anonymous Trust. Because of the superior position she was in due to her asset protection strategy, they eventually dropped the lawsuit against her.

As real estate investors, we should all be using this type of asset protection strategy. If you have any questions about asset protection, feel free to ask me in the comments below or read more of my free educational pieces.

Is Your LLC Easy to Sue or Is it Litigation-Proof?

You've likely heard online from some keyboard warrior or a CPA or perhaps even from an attorney that an suing an LLC is easy. This is absolutely not true.

LLCs are incredibly hard to sue, if not litigation proof, if they are maintained correctly. The problem is that most LLC owners don't do the things necessary to maintain their LLC's legal status. If you don't treat your LLC like an LLC, then when a lawsuit comes around the courts won't either.

Let's go over what you need to do to keep your LLC litigation-proof during a lawsuit.

How To Keep Your LLC Litigation-Proof

The first thing you need to keep in mind is that you must maintain records and accurate accounting of your company. If you don't have a company bank account, you need to get one ASAP. Here are two things you should ask yourself when it comes to your company bank account:

You need to run everything through a bank account for your company to make sure its seen as a legitimate and separate entity from yourself. Bonus: This will also make doing your taxes easier.

You cannot treat your company bank account as if it's your personal piggy bank. This means you have to be careful in the accounting for your company. If you ever take money out of your company account you must keep a record of it as a dividend from your company.

If you fail to do the above, your LLC's legal status will no longer apply. You will be easy to sue. Keep your records on point to keep your LLC protected.

Maintain Accurate Records And Suing Your LLC Will Be Harder

I recommend keeping an eye on your company bank account at all times. Even CPAs can make mistakes.

If you have any questions about what we just went over feel free to ask me in the comments section, I'd be glad to help you. If you've got this down, check out our other posts to learn more about preserving your wealth with an LLC structure.

If you're ready to form your LLC or improve your asset protection plan, we can help you. Schedule your personal consultation today. Our experts can assist with every aspect of company formation, management, and oversight. We're also happy to address your business banking and tax questions.

What Does A Nightmare in Litigation Look Like?

What does a nightmare in litigation mean? It means having to risk thousands and thousands of dollars with the mere hope of being able to get something out of the other party. This is the nightmare which causes the attorneys looking to sue you to lose sleep at night.

Think about all the commercials you see on TV about personal injury law firms. These guys advertise to get clients for these specific type of lawsuit because they know they can win them.

Now ask yourself this. As an investor and as a business person, do you go to Las Vegas rolling dice hoping that you'll recover (money, assets, etc...) ?

Probably not and neither will an attorney. Suing people is usually a gamble for attorneys because they tend to get paid from the settlement. However, in order to get a settlement they have to win.

No attorney is going to try and sue you if they think there's not a good chance of winning. They can't make money if they don't win. Attorneys are in the business of only taking cases that are guaranteed wins. They won't take a case they can't win and they won't dare try to sue you...

At least not when I've got your back. You wouldn't believe how powerful asset protection is.

At Royal Legal Solutions we Take Legal Asset Protection to The Next Level

Attorneys don't like to lose, and when you gamble there's always a chance you might lose. What we do is make it a gamble for attorneys to come after your assets. Most attorneys aren't willing to put in the time and effort to sue you when they know there's plenty of other people they could easily win lawsuits against.

We specialize in making your assets untouchable and intimidating to pursue in court/litigation. You could own a company generating over six figures in revenue yearly, or even millions, and nobody would know except you.

But let's say someone were to win a lawsuit against you. Because of the asset protection plan you have in place (thanks to us) their ability to come after your assets would be next to nothing.

Asset protection involves the use of LLC's, Series LLC's, Anonymous Trusts, and several other legal structures. These legal structures are proven to work, legal and cost effective.

How To Protect Yourself As A Real Estate Investor

The real estate industry is highly profitable. But like all things that come with a great reward, there's also a great risk. And in this industry, you're risking your hard earned dollars.
All it takes is one lawsuit and you're out of the game, permanently. Insurance won't save you. (Surprise: It's not even meant to anyway.)
Let's go over how to protect yourself as a real estate investor.

You need asset protection To last In this industry

You may have already heard of asset protection. If not, you're about to. Asset protection involves using legal structures and smart contracts anytime you do a real estate transaction. The legal structures I'm referring to include LLC's, Trusts, or shell companies.
Using those legal structures, combined with asset protection, allows you to stop lawsuits before they happen. Legal structures do this by first and foremost making you extremely difficult to sue.
It's not that people can't or won't want to sue you. It's just no lawyer is going to want to waste his or her time trying to.
Legal structures will allow you to mask your wealth. You could be worth well over 6 or 7 figures, and nobody would know. And even if they spent time investigating you, they'd realize you're extremely difficult to sue because you're using asset protection.
Think about it. Who's going to sue you if you have nothing of value to offer them? Furthermore, who's going to waste their time investigating you when there's no guarantee that you're even worth investigating? Nobody, especially a lawyer. (I would know, I am one!)

Asset Protection keeps you in the game

Without asset protection, you can lose everything. And no, I'm not joking. Real estate investors lose lawsuits everyday because they didn't have an asset protection strategy in place.

If you plan on owning several properties there's no reason not to get an asset protection strategy. The costs of asset protection are far less than the legal fees and time you'll spend defending yourself against a lawsuit.

You're vulnerable to a lawsuit every time you:

These are all things insurance doesn't cover. The only thing that's going to protect you and your hard earned dollars is an asset protection strategy. Period.
If you have any questions about how to protect yourself as a real estate investor I'd be glad to answer them in the comments below.
Learn more about asset protection.

The Two Biggest Reasons Why New Real Estate Investors Lose Money

Welcome to the real estate industry! You'll quickly find out how easy it is to lose money when you don't know what you're doing. And even if you do know what you're doing, you can still lose money if you're not careful. But let's assume you're new.

I'm not trying to be a "party pooper" or anything like that. As a real estate investor myself, I just want you to know what you're getting into. So what exactly are the two biggest reasons why new real estate investors lose money?

You Will (Probably) Make Bad Investments

While it's not necessarily a guarantee that you'll make bad investments, the probability is high. However, it's only natural to be "bad" at something when you first start doing it. *wink wink*

But is there really any other way to learn other than from your mistakes? Yes and no. I recommend new investors do joint ventures with more experienced real estate investors before they go out on their own. Just make sure you find someone who knows what their doing if you choose to do that.

So what's the other big reason why new real estate investors lose money?

You Will (Probably) Get Sued

This one might surprise you. The truth is anyone can and will sue you if you're worth enough. It could be a random person off the street or even a business partner. You never know when it'll happen, but you have to be prepared. Otherwise you could lose everything.

Luckily for you, preventing lawsuits is easier than learning how to not make bad investments. The most proven way to prevent lawsuits is through asset protection. Asset protection involves the use of LLCs and other legal structures when doing real estate transactions and signing contracts.

Like I said earlier, anyone can sue you. But that's only if you're worth enough. Asset protection can make it appear as if you're worth nothing. Or, you can use asset protection as leverage to convince someone not to waste their time suing you.

Well that's everything. As always, if you have any questions feel free to ask me in the comments below. For questions about your individual situation, contact us directly.

The Dangers Of Fraudulent Transfers & Lawsuits

The Law Favors The Proactive When It Comes to Lawsuits

Being proactive means instead of reacting, you're directing. Why react to a lawsuit when you can direct your assets and avoid a lawsuit all together?

In the real estate industry lawsuits are filed everyday in the United States. If you're not protected, you can easily be caught up in one of them and lose everything. We're talking home equity, other assets and even your car. So if you're thinking about waiting to set up your LLC structure, don't. The fact of the matter is, once you're sued, it's already too late.

So once someone threatens you with a lawsuit, you might want to transfer your assets to someone else to protect them. The problem there is asset transfers after the fact of when a lawsuit is threatened or before it's even filed, can be considered a fraudulent transfer.

A fraudulent transfer doesn't necessarily mean that you did anything that was shady. All it really means is that you transferred the asset outside of the normal course of business.

Fraudulent Transfers

For example, you can't sell it to your niece for a dollar and think nobody will say anything. But if you sold it for what it was worth, then you'd be okay. Still, the best thing you can do is be ready for a lawsuit.

The best way to avoid a lawsuit is to be ready for one. I've written about a number of ways to do this. One such way is to hide the equity in your real estate from creditors, which you can read about here.

Don't Wait, Be Proactive

A solution won't just fall out of the sky and into your lap. Remember, the law favors the proactive. And one of the best things you can do to that end is to contact a specialist.

How To Make Your Assets Judgment Proof In A Lawsuit

If you’re a real estate investor, you are at risk from lawsuits whether you know it or not. You may already know the real estate industry is a breeding ground for lawsuits. Now add in the fact that you live in a country where people can sue you for nearly anything.

As a real estate investor, you’re at risk of losing everything: equity, assets, and even your reputation. This is especially true if you hold assets in your personal name.

Did you know that a lawsuit is ranked one of the top three things that people find the most distressing events in their life? Lawsuits rival only with divorce and bankruptcy. The good news is, I can make your risk disappear. This means you’ll be untouchable when it comes to lawsuits.

How, you ask? First there’s something I’d like you to know: the truth about how the wealthy protect their assets.

The Truth About Protecting Your Assets From Lawsuits

The truth is the super rich don’t own assets. They only control them. They do this through a network of LLCs and trusts. These networks protect their assets and allow them to hide them from anybody looking to come after them. You can learn more about how LLCs and trusts protect you from my previous article on the subject.

Imagine the disappointment of anybody looking to sue you when they find out you don’t own anything. Well, at least it will look that way on paper. In reality, you could be worth millions and only look like you’re lower middle class. But the person suing you won't know that.

Who would sue somebody who appears to own nothing? That’d be a waste of time. Remember, the average person doesn’t have the money to pay legal fees upfront. What most people do is split the settlement, assuming they win.

Make Your Assets Judgment-Proof Now Before It’s Too Late

No attorney is going to come after you in a lawsuit if they think they have nothing to gain, pure and simple. But you better believe they’ll see dollar signs when your name starts showing up in  paperwork.

My name is Scott Smith. I’m a real estate investor & an asset protection attorney. I know both sides of the game because I’ve played on both. Give me a call today, and together, we’ll make your assets judgment-proof!

How A Lawsuit Can Ruin Your Life: Asset Protection, Foreclosure & More

Do you realize that a lawsuit can ruin your life? Lawsuits and judgments where even small amounts of money are involved can force you to sell one or more properties, essentially making all the work you've done worthless.

By the time you're done paying the judgement, legal fees and your new therapist you'll be back at square one. That last one is only half-joking. Lawsuits take a toll on your finances and your emotional well-being.

This type of doomsday scenario happens more often than you might believe. The reason is because once a ruling has been made, it must be satisfied. If you don’t have the cash on hand, you may be forced to "liquidate" assets or go through foreclosure in order to complete the terms of the judgement, depending on the state you live in.

Your Doomsday Lawsuit Scenario

Imagine a scenario in which a modest judgement has just been rendered against you. You owe the plaintiff $50,000. It’s important to realize that this is not a large amount when it comes to real estate litigation, nor is it uncommon for a landlord/tenant judgement. Nevertheless, it’s a significant amount of money and needs to be paid. Now, unless you like foreclosure auctions. And unlike usual, it's your properties being bid on!

Once the ruling has been made, the plaintiff has the legal right to take a variety of actions to satisfy the judgement. This includes forcing you to foreclose and hand over the proceeds of the sale.

A Real World Lawsuit Example: Fees & Loss of Your Real Estate Assets

While we never discuss individual asset protection clients, we can provide approximate details to illustrate how even a small judgement can destroy years of work and sacrifice.

Consider the following:

  1. You recently took advantage of the FHA ($11,500 in equity) to purchase a $300,000 apartment with only 3.5% down.
  2. Next, you put 25% down ($25,000 equity) on a second condo worth $100,000.
  3. You finished paying off your car loan this month, which is now worth $25,000 (equity).

The only problem is you had a lawsuit gone wrong. The judge ruled against you and you’re now required to satisfy a $50,000 judgement.
However, it’s more than that because the judge also decided you were responsible for paying the attorney fees regarding the seizure and sale of your assets. You have 3 assets at your disposal, which means potentially $9,000 ($3,000 per asset) in additional fees.

Let’s take a look at how that payment might work:

  1. You are forced to foreclose on your apartment. This covers $11,500 of the $50,000 (plus an additional $3,000 in fees).
  2. You’re down to $41,500 remaining, which means you have to sell your condo for $25,000.
  3. This gets you down to $19,500 (once you remember to add the next $3,000 in fees). So you can sell your car as well, which covers the final judgement and fees.

The result? You’re left with a measly $2,500. Oh, and you’ve lost your home, vehicle, and all of your assets. Your life has effectively been ruined from a single lawsuit and it will take you years to rebuild what you lost over just one lawsuit.

You can learn how to protect yourself form lawsuits using the legal techniques we use to defend our asset protection clients.