THE DO'S AND DO NOT'S OF ASSET PROTECTION

                           

                  An individual with debt will often make poor decisions in regard to the
                  disposition of their assets. It is important to understand the laws with 
                  respect to protection of your assets.


                                                       "THE DO'S"

                  1. It is important to consult an attorney to have the law explained to
                      you because  often I find that people rely on misplaced advice from family
                     or friends about their assets.   

                2. Do not sell assets like 401K's, IRA'S, and other retirement benefits
                    as they are protected from your creditors under applicable federal and state
                    laws. I have seen too many clients liquidate their IRA'S  and are left only
                    with homes that have negative equity.

               3. If  you are having difficulty paying your creditors and need to sell assets,
                   sell assets that can be seized by creditors such as stocks, bonds, savings
                   accounts and extra cars. Assets like jewelry and fine art are in your house
                   and not easily identifiable by a creditor, unless it is a personal friend or
                   business associate. Nevertheless, you will need to liquidate these assets
                   at fair market value if  forced to file bankruptcy at some point.

             4.  If you are still paying your creditors in a timely manner, but foresee
                  the possibility  of defaulting on your debt in the future,you may want
                  to contact a trusts attorney to determine the feasibility of placing
                  certain assets in a trust.

                                                 
                                       "  THE DO NOTS"**
                  
             1.   You are prohibited from transferring  from  non exempt assets
                   into  spendthrift trusts within 4 years of filing bankruptcy.

            2. You are not allowed to accelerate the payments on your mortgage within
                2 years of filing bankruptcy.

            3. You can not transfer assets to relatives,close friends,or associates within
                4 years of filing bankruptcy in Florida.
           
            4. While you may acquire ownership in real property which you reside in
                prior to bankruptcy,the  issue of homestead may be contested by the 
                bankruptcy trustee. In order to claim the residence as homestead, you will 
                need to have resided in  Florida for a period of 730 days. Also, if you have
                owned the residence for less than 1040 days,then the allowed amount you 
                can claim for homestead is $155,675.00.
            
**The debtor in a bankruptcy may have defenses to the transfers above,and the standard is whether the transfer was done to delay,hinder,or defraud creditors. Also, other factors including whether a large judgment is pending or the extent of  the insolvent state of the debtor will allow a court to determine whether the transfer is fraudulent.

Please contact the law office of JOHN E. MUFSON PA if you have any questions.
 561-272-1003   Mufsonlaw@aol.com