Asset Protection isn’t a guarantee that you won’t get sued.
However, if you are sued and your assets are well-protected, Asset Protection
planning ensures you are in a strong position to negotiate a fast, inexpensive
settlement for pennies on the dollar.
Always negotiate from a position of strength. Let your opponent know you
have nothing to lose, and they have little or nothing to gain from their lawsuit.
Most plaintiffs won't know that you're shielded until after they
sue and your attorneys talk. A good defense lawyer
sells the reality that you're judgment-proof. Your goal is to settle the lawsuit quickly and inexpensively. Plaintiffs
also realize they'll have attorney fees – 25% to 50% of any
recovery. And the creditor isn't always sure about his legal position.
A litigant will also wait years for trial. Why go through all this when
you are judgment-proof?
The trick, of course, is to become judgment-proof so you can prove you
have no exposed assets. If so, more negotiating tips:
Sincerity, quick action and close contact with your creditors are vital
to build credibility and reduce hostility
Prepare accurate financial statements before you negotiate
Truthfully reveal that you have few or no exposed assets
If other creditors hold priority claims, sell this point, too. Treat your
unsecured creditors equally. Give each a proportionate settlement. Give
no one creditor a better deal. Be flexible.
Will you pay a lump-sum settlement or installments? Will you pay interest?
Give security? You have points to negotiate. Be realistic. Don't settle
if you can't honor your deal. Bargain for a lower settlement if that's
all you can pay. Persist.
Creditors may not initially accept your offer, so try again. If you can't
convince a creditor to settle, can your attorney? Protect your credit.
Have your creditors agree not to file a negative, late payment mark against you.