How do I protect my assets from creditors?

I broke my lease with my apartment complex 9 months ago. I left with a unpaid balance of almost $2,000. I have made payments to creditors and my balance is about $1,500. I recently lost my job and can’t make payments at the time. I got a call from the creditor informing me that they will be processing a judgment against me. I would like to know what will happen after they do that? I don’t have much other then my car which isn’t worth more then $2,000 and just $200 in my bank account.

Asked on September 21, 2011 under Bankruptcy Law, North Carolina


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

At this point, there proably is nothing you can do to protect yourself from creditors:

1) Estate or financial planning to protect assets has to be done well in advance of having known debts in many cases. Otherwise, if you, for example, transfer the car to a family member while knowing that you have a judgment against you, that transfer, under those circumstances, could be considered a transfer made to defraud creditors and therefore reversed or undone. By the time you really wish you'd protected your assets, it's usually too late.

2) While declaring bankruptcy is an option, the cost to you--not even the monetary cost, but the devasting hit to your credit for a period of around a decade--is likely far worse that the impact of the judgment.

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