Commercial funding and other forms of borrowing, orthodox or unorthodox, pave the way for significant flow of resources which in the be all and end all is critical to keeping an active business like the commercial real estate up and running. Proposed project owners also take advantage of financing to see their projects to successful finishing. Business persons and individuals who avail funding have the benefits of cashing in on short-term opportunities with high profitability. For the record, such opportunities come but once in a blue moon.
Be financing as it may, it comes with several challenges and the biggest of it all is dealing with a shylock or better yet, a loan shark known for their fly-by-night and shady operations which are tailored toward hoodwinking borrowers. Operating such creditors could cost a borrower their assets and or businesses. Other liability issues do exist too but such as the one associated with financing is pretty common and fly-by-night creditors employ it to take advantage of borrowers. Caveat emptor.
For what a liability crisis is worth, acting prudently when seeking credits would help keep the catch 22 challenges attributed to financing at bay. Acting prudently is not unconnected with working with experts like asset protection lawyers and financial planner for asset valuation and protection planning. By putting in place a protection plan for assets before a liability crisis looms, loan sharks and other entities alike are rendered ineffective and powerless over one’s assets.
What is Asset Protection Planning?
Given the fact that this day and age, debtors are exposed to several unmanageable risks and uncertainties due to the shady practices of creditors, legal arrangements have been put in place to protect debtors. In other words, sort of a creditor-debtor protection law, asset protection incorporates several legally instituted practices aimed at protecting businesses and individuals from unfair civil judgements which paves the way for creditors to create liens on debtor’s assets.
The practices include statutory and common laws. Protection planning for assets is one way of shielding assets from creditors so that in the event of liabilities the assets are liens-protected. Most people mistake it for limited liability. Compared to asset protection, in a crisis involving limited liability, a court renders a verdict to stop the creditors from going over a particular asset belonging to the debtor.