Thanks so much for following up. He cannot. Until and unless he actually sues you and obtains a judgment against you, he cannot take any actions with regard to any of your assets, including trying to attach any closing proceeds from the sale of your property. Without a judgment, he can do nothing. In the meantime, if you think he has a valid claim and is likely to get a judgment, to protect your proceeds, once you close you might want to consider putting those proceeds and any other assets at risk into a family limited partnership. Carefully drafted, this converts assets that a creditor would find attractive to go after into a limited partnership interest with no control, no rights other than that of an assignment, no transferability, no marketability, and no right to distributions. The transfer is for fair market value…i.e., you are simply exchanging one asset for another of equal value to you. And, you maintain control through a general partnership interest that you control. Yet, when complete it essentially is an asset no one wants and thus the creditor is less likely to pursue the debtor. Family limited partnerships must be carefully drafted and one would need an attorney experience in this area to do so, but they can be a very effective method of asset protection
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