Consumer Protection Law
Consumer Protection Law Questions? Ask a Lawyer Now.
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An LLC would not really protect them as well as you think, because creditors can place a lien on your interest in the LLC or even pierce the corporate veil to get at the property. If you put your property in an irrevocable trust, which is called the ultimate asset protection tool, then no creditor could get at the property in the irrevocable trust. If you put your property into the trust, then your houses would be protected.
If you file bankruptcy, you can protect your primary residence under your homestead exemption and as long as you pay the mortgage you would retain it, but you would likely lose the other house.
At this point sitting with a local trust attorney is your first step and then get the irrevocable trust in place before you make your next move of trying to get out of the debts from the business by filing bankruptcy. This is the best way to protect yourself.