How to protect myself/assests from lienholders?

UPDATED: Mar 10, 2012

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How to protect myself/assests from lienholders?

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.

Asked on March 10, 2012 under Bankruptcy Law, Vermont


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

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.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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