Bankruptcy is a daunting prospect, and many people believe that they will lose everything. Fortunately, there are a few legitimate ways that you can keep your assets safe.
Although individual North Carolina counties may vary, most allow some form of asset protection. This is done through exemptions or by pre-planning your bankruptcy.
Use a trust
You can put some of your assets into a trust that an independent party administers. Make sure you read up on irrevocable trusts before you decide to go this route. There are considerable regulatory requirements to these, but if you have assets that you want to protect during your bankruptcy, it can be better than losing them completely. Remember that you will need to completely trust whomever you appoint as trustee.
You can strip the equity from the property that earns it. After you have the cash, you can put it in assets that are exempt from your bankruptcy. You have to be very careful where you put the cash, or you will lose it when you file.
Family limited partnerships
You can transfer your assets into a family limited partnership. Although you will retain control of your assets in this situation, they are significantly devalued so that you won’t get as much for them. You will also need to trust those that you name in the partnership.
There are other ways to keep your assets, but these are the safest. Make sure you carefully plan your bankruptcy, so it accomplishes what you need it to and protects your most valuable assets.