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Ask Law Educator, Esq. Your Own Question
Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Consumer Protection Law
Satisfied Customers: 116215
Experience:  Attorney experienced in commercial litigation.
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My husband and I owe a that isnot doing good. We have

Customer Question

My husband and I owe a that isnot doing good.
We have personally guaranteed most of our leases. We currently own a house ( already paid off the mortgage, its value is $180k) and we just bought our second house.
We were advised to put our two houses under and LLC to protected them.
What happen in case of defaulting on the leases ?
Is there anyway to protect our assets?
If we file for bankruptcy in North Carolina would we lose one or the two houses?
Submitted: 1 year ago.
Category: Consumer Protection Law
Expert:  Law Educator, Esq. replied 1 year ago.

Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.

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.

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