Using Debt-Shields to Reduce the Exposed Equity of Protectively-Titled Property

Once a property is protectively titled, its exposed equity can be reduced with debt-shields, as we suggest with the family home. You want to adopt the same equity reduction strategies you'd use with your home. The goal is to fully encumber your real estate. You want that profile of 'poverty' that discourages lawsuits. So that calls for third-party liens against your investment properties. If you have good credit, you can borrow 70 percent or more of the properties' value from conventional lenders (banks, finance companies, etc.). With poor credit, or if you otherwise cannot obtain a conventional loan, 'hard money' lenders will lend at a steeper finance charge, which may still be preferable to losing your property in a lawsuit.

Though it's easy to understand the role of 'equity-stripping' in Asset Protection, the problem is implementation. You may not know how, or where, to find the right lenders. Or you may not know how to 'defensively position' and mortgage your property. But there are a number of different ways to structure secured real property loans. As with residential loans, we arrange loans and debt-shields for even the poorest credit risk property owners. Our financing arrangements involve third-party guarantees, collateralizing the loan proceeds with 'back-to-back' loans, loans from international entities, and so forth. We also routinely encumber property through complex insurance/financing arrangements which fully encumber our clients' real estate. Debt-shielding commercial property, however, can be simpler. Start with banks, finance companies, and conventional asset-based lenders. Or use an affiliated company as 'your lender' if you own smaller, less valuable properties.

We've debt-shielded the poorest credit risks from international lenders to legally and effectively encumber assets and estates worth millions. Our financing arrangements are generally tax-neutral, and neither saves nor defers taxes. For example, one car dealer in heavy litigation fully encumbered his $2 million home, vacation property, and car dealership valued over $6 million through a complex patchwork of cross-collateralized loans. Once his assets were fully encumbered, we settled a 20 million dollar lawsuit against him for only $100,000. Without these mortgages to shield his equity, the lawsuit would have cost him a fortune.

Equity-stripping is a vital strategy. We can arrange 95 percent loan/value mortgages against any type of asset – real estate, a business, vehicles, notes receivable, intellectual property, and so forth. We can fully encumber and creditor proof virtually every U.S.-based asset. The loan proceeds are back-up collateral secured through an international trust. And a strong credit rating is unnecessary. Moreover, interest on the loan is set at about one-half percent, so your cash-flow impact within the loan term is minimal. This program is likely your best equity-stripping option if you have $500,000 or more in U.S.-based real estate or other assets that require protection.