Protection Of Valuable Personal Property
Valuable personal property owned free and clear is difficult to protect from creditors. Consider, for example, my client who owned outright a private airplane. The client was unmarried and owned all assets in his individual name. The client had imminent legal problems so that any transfer of the airplane title would probably be deemed a fraudulent conveyance. One option was for the client to pledge the airplane for a bank loan. That option had two problems. First, my client did not have good credit and a loan secured by the airplane alone would be difficult and expensive. Secondly, he did not want to pay interest on a personal property loan and he had no place to shelter the loan proceeds if he did get the loan.
His main asset protection tool was to be the purchase of a new homestead and getting a home equity line of credit to borrow money for living expenses.
My client decided to pursue a combination of his home equity loan and a loan secured by the plane. He intends to propose that his bank cross-collateralize a line of credit on his house with a lien on his airplane. This solution would not incur interest costs over and above his home equity loan. He would not have excess loan proceeds to protect as borrowed funds would be spent as needed for expenses. It will be interesting to see if this client encounters problems in structuring a real estate mortgage cross-collateralized with a lien on his airplane.
posted by Jonathan Alper, asset protection and bankruptcy attorney, Orlando, Florida.
Are the contents of a home protected under florida law (furniture, art, etc) assuming that other homestead requirements are met?
I am trying to refinance a house that I just built, that is not my homestead, to have a higher mortgage on it to pay off debt that I have incurred during the building process. I plan to move into it permanently as soon as I can sell my homestead property. The new mortgage on the newly built house is written as my primary residence (lower interest rate). It states that it will be my primary residence within 30 days. I will not have sold my homesteaded house in that amount of time. Will I be breaking the provisions of Title 18, United States Code, Section 1014 if I sign the mortgage? I want to keep my first house as homestead until it sells because the taxes will jump drastically when I no longer have the exemption on it. Can I call the second house (the one I am getting a mortgage on) as my primary residence and still maintain my homestead exemption on my home that is on the market at the same time?