How to protect myself/assests from lienholders?
Question Details:
About 2 years ago my wife and I used our primary residence as collateral to purchase and renovate a building for business purposes. Since then we are divorcing I will get the primary house (her name will be removed from the deed) and she the business property. The lien on the house still remains as we are not in a position to refinance. My question is can the lien holder (bank) force me to sell in the event she defaults in her business? How can I protect my house? The lien is 249k way too much for me to absorb. Currently, the value of the business property is more than the lien in question.
One of the best ways to protect one from loien holders is to create an irrevocable trust and place all assets that one has in it where a third person (not you) is the trustee under the trust. As to any default by your wife on the business she will have will not result in a requirement that you will be forced to sell the home so long as you are current on its monthly debt payment to th lender on the home.
I suggest that you have a capable family law attorney representing you in the marital dissolution and that the written marital dissolution agreement to be signed be very detailed as to what obligations you and your soon to be former spouse have to the retained assets and each other.
