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 ScenarioImagine 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 AssetsWhile 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:You recently took advantage of the FHA ($11,500 in equity) to purchase a $300,000 apartment with only 3.5% down.Next, you put 25% down ($25,000 equity) on a second condo worth $100,000.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:You are forced to foreclose on your apartment. This covers $11,500 of the $50,000 (plus an additional $3,000 in fees). You’re down to $41,500 remaining, which means you have to sell your condo for $25,000. 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.