What if a home equity line of credit covers only part of the equity? How do you shelter the remaining equity?

Your goal is to have your home 100 percent encumbered. Shopping for a second or third mortgage is one possibility. Lenders may loan up to 90-95 percent of value if you have good credit. Or you can pledge other assets to further collateralize the home loan. A co-signer might get you a 100 percent loan. Executory obligations can also be consideration to support a mortgage. There are hundreds of ways to fully encumber a home – or any other asset.

In practice, a home mortgaged to about 85 percent of value should be adequately collateralized. Homes seldom yield more at auction. Your homestead protection may also cover the remaining equity in your home, and if so you would need a far lower loan to shield the exposed equity. You can equity-strip or encumber your home even after you are sued and this wouldn't be a fraudulent transfer since you received simultaneous consideration for the mortgage – the loan.