Bankruptcy can strike without warning and if you implement time-tested strategies, you can secure your assets through backruptcy property protection. The strategies are simple and you need not change the scheme. Moreover, there are laws in place to help you come up with property protection strategies when bankruptcy strikes. If you are struggling with asset protection in times of bankruptcy, read on to the end of this piece.
If you wonder how to property protection during bankruptcy, consider implementing these strategies to achieve effective backruptcy property protection.
Consider choosing the right business venture
A good business entity will ensure that your assets are safe when bankruptcy strikes. When that happens, you need not worry about your creditors seizing your assets. For instance, if you operate as a sole business owner, you may not be able to protect property duringbankrpuptcy. That type of venture can simply expose your assets to a possible lawsuit. However, with a good business entity, you can protect your assets from the effects of bankruptcy.
Do not discard your corporate veil
Even with a good business venture, you still need to implement other strategies to keep your assets safe in the event of a bankruptcy. For that reason, consider maintaining a second checkbook and a separate bank account for your business.
If possible, consider using the name of company documents. In addition, it can be better if you register the properties in the company’s name. Maintaining corporate records and keeping annual meeting minutes is another way to ensure some level of safety on your assets during bankruptcy. This is important in ensuring that you develop a proper backruptcy property protection when bankruptcy strikes.
Consider using proper procedures and contracts
Without proper records and contracts, you give your creditors opportunity to attack your corporate veil. For example, if there are elements of fraud and negligence in your dealings, the creditors will have an opportunity to attack you. You can avoid this by placing equipment and property titles in the company name, securing proper lease agreements for rentals, and including subcontractors’ agreements and contracts on each project you undertake.
In addition, experts suggest that you should depend on written contracts and not e-mails when you engage important business issues.
Consider purchasing appropriate business insurance
Since insurance is an important part of a business, it should form part of your startup budget. With reliable coverage, you can be able to control liabilities on your business. Therefore, ensure you engage the right company for appropriate insurance policy to cover your assets. For instance, if you have different types of businesses, you should have different types of coverage to suit the enterprises.
Consider registering some assets in your spouse’s name
In some circumstances, one spouse may have a riskier lifestyle or occupation. In that case, it is advisable to register some properties in the name of another spouse. This may prevent creditors of the affected spouse from reaching the separate properties that are registered in the name of the other. More about bankruptcy property protection is available here: https://www.debtmediators.com.au/bankruptcy-protected-property/