Asset Protection

Definition: Asset protection is designed to protect your property, including stocks, bonds, and real estate, against creditors who may attempt to take it by initiating legal proceedings against you or your relatives. Creditors may also attempt to fraudulently induce you into giving them money or using your property as security for a debt.

Asset protection is a way of protecting assets from creditors — i.e., someone who takes your money and tries to make you pay them back with interest or a loan. Some investors and entrepreneurs buy insurance against legal claims against their assets. This can be purchased directly from an insurance company (sometimes called an annuity or life insurance plan), or it can be offered by brokerage firms that specialize in asset protection.

Asset protection law provides a legal framework within bankruptcy law to strictly limit what creditors can demand as a condition of release from debt. The goals of asset protection law are to:

  1. Prevent creditors from seizing assets without due process; and

 2. Provide a disciplined means for transitioning from creditors’ control to the debtor’s control in a process known as liquidation. 

An individual’s assets may be subject to asset freeze or asset foreclosure when a debtor’s default or bankruptcy case involves a personal asset. As a business, you may benefit from protecting certain assets for losses sustained on business operations, contracts, inventory, inventory-related items, intellectual property rights, and any other assets subject to forfeiture or subject to a lien that cannot be paid in full after seven days.

Asset protection is a legal tool that prevents a debt collector from seizing a debtor’s assets if the debt is not paid within a set period. Many people use this process to prevent creditors from taking money out of their bank accounts or property without actually proving that they have the money. Asset protection laws vary based on who is owed the money and what type of asset is being protected. That is why it is essential to know how asset protection works to understand your rights and the steps that need to be taken to prevent your assets from being taken by debt collectors.

Asset protection products are designed to stop the loss of your assets due to fraud or other unlawful means. The objective of the product is to provide timely, predictable, and substantial loss reduction with reasonable efforts at preventing or minimizing the risks to the assets. All asset protection policies include limits on liabilities per protection period and recovery costs and fees. To be eligible for the asset protection product, you must provide proof of loss and meet minimum asset protection requirements.

Asset protection can be achieved through various means, including life insurance, endowment plans, and cash saving plans. When utilized correctly, asset protection can provide a cash savings plan for your future needs should such an event arise, preventing catastrophic financial damages from occurring without you having to pay for them. Asset protection services are available from various firms, including Shine Lawyers, Bertelsmann Global Investors LLC, and Mercury Public Affairs and Advisors.

Any insurance policy does not cover jointly held property, and so the value of your possessions might be limited by the value of the property on which they are located. This is why tenants, by the entirety, might be worth looking at – they are securing the assets of the partnership and extending the value of this secure property to include other assets inside it. This type of asset protection may be advantageous when one partner has passed away or suffered emotional distress requiring continuous care by another party to safeguard vital assets.

Asset Protection is a legal right that can be used to protect your income if you have been made bankrupt by your creditors. If your income has been drained through unemployment or unfortunate circumstances, you may be eligible for this protection. Adding protection to your finances will allow you to get a new job and reduce your payments from creditors. An essential part of applying for this type of action is an investigation by a bankruptcy attorney. This will help establish facts that may indicate you are eligible for the protection you are seeking.

Asset protection has been around for decades. It has evolved and become more sophisticated with each passing year. Asset protection is specifically designed to preserve your assets from legitimate creditors, including business partners, contractors, suppliers, banks, governments, and non-bank financial institutions.