How to protect DVC as Asset Due to a Foreclosure

[Allison]

Why is it you think you can just walk away from the amount your owe the bank in a legitimate transaction?

 

[Carl'n'Ellie'sDad]

The responses to the OP on this thread by several others make me experience a feeling that, like Michele Obama mentioned a while ago, I haven't experienced often recently -- though for rather different reasons. Just thought I'd say I'm proud of all those who have issues with the OPs "strategy," and proud to be a part of this DIS boards community!

 

[heynowirv]

Spoken like a person i respect and a fellow philadelphian suburbinite,or something along those lines.

 

[lilpooh108]

As a banker who deals with commercial/investment customers every day, I have to agree with the previous posters that have made the points about morals and promises to pay. You are the investor and as such get all of the upside when an investment goes well. Likewise, you absorb the downside. The bank only gets it's money back with some interest. If your investment had doubled, the bank would not be asking for additional money from you. If more people would take responsibility for their actions, our country would be better off. No one helped me when my 401k went down during the recession. I know it is difficult, but tighten your belt and pay what you owe then get back to the luxuries of life.

Sorry to rant here, but this one struck a little close to home for me.

Bravo to this post.

By the way, OP, your state likely has enacted an UFTA statute (Uniform Fraudulent Transfers Act) whereby you can be found liable for either fraudulently conveying assets or fraudulently incurring obligations with the intent to defraud your creditors. Which means, in essence, it doesn't matter if you hold it in an irrevocable trust or acquire DVC in your grandma's name, if you paid for it with money that should have gone to the bank left holding the bag on your bad investment, it's fraud.

Unfortunately I live in a County where people's decisions to "walk away" from their bad investment is artificially depressing my home's value and preventing me from refinancing at the moment, so yes, this one hit close to home as well.

 

[lilpooh108]

Although setting up a trust in and of itself is legal, doing so to defraud your creditors is not.

There is a difference between going about your everyday life and setting up a trust to protect your assets, versus knowing that you're about to breach a contract, default on a loan, walk away from an obligation, and taking the money owed to that creditor on that obligation and doing something else with it.

There is a reason why there are fraudulent conveyance statutes in most states, and in federal law.

 

[CarolAnnC]

This thread has been edited as there may have been postings of an argumentative nature, or just quoting deleted post(s). Appropriate warning(s) have been issued.

Sticking to the original topic of DVC ownership and bankruptcy is fine. Please just no picking fights or attacks. Thanks everyone!

Feel free to continue...

 

[Mississippian]

I just want to say that the original poster is probably looking at the need for a bankruptcy or a long debt struggle. There is no way to avoid paying a debt, and you cannot simply transfer property to another or to a trust to avoid paying a debt as it is a fraudulent transfer.

Consult with a good bankruptcy attorney NOW. Much of the equity in your home is exempt. Your retirement is exempt. Plan ahead while you are semi-solvent and you can come out of a bankruptcy with a reasonable net worth. And as your debt sounds like it is a business debt, you may not need to worry about the means test.

Good luck, but be forewarned. You need to be honest in the bankruptcy process and not hide assets. People get caught far more than you would think and then you can go to jail and in any event won't get your debts discharged ever.

 

[TheRustyScupper]

1) There is a lot of info posted here.
2) But, there is a major fact that you have not told us.
. . . you are walking away from an investment
. . . let's assume it is a mortgage of some type
. . . now, what is mortgage stipulation for recovery
. . . in other words, can they ONLY claim the item mortgaged
. . . or, can they sue you for the lost investment principle/costs/etc
3) This is spelled out in every mortgage.
4) Assuming the mortgaged item is the recovery, you have no worries.
5) If they can sue you for recovery, NOTHING protects the DVC.
. . . if you title it to a trust, they can get your interest in the trust as an asset*
. . . if you put it into an LLC, they can get your interest as an asset *
. . . if you title to the wife (or kids) they can get as a sham transfer
6) Thus, you must answer #2 to decide how to proceed.
7) Obviously, call your lawyer.

* In most cases, a lawsuit cannot disband/pierce an LLC or trust.
However, a judgment against you would allow the other party to take
at least your interest in the trust or LLC.
EXAMPLE:
. . . you build an LLC for you-wife-kids
. . . you put in DVC ownership
. . . a suit lost would take your & wife's shares of LLC
. . . it might be able to take the kid's share
. . . the LLC isn't broken, but you lost your own LLC shares

 

[zebsterama]

I think it might be rash to assume that a fraud would be committed in this situation - as illustrated in point number 2 in the post above.

 

[JimMIA]

As I have read this thread, OP's intent with this thread has nothing to do with bankruptcy.

If we go back and read what OP wrote, they want to know how they can hide a DVC purchase from a legitimate creditor to whom they owe $150,000 or so. OP is asking what she can get away with.

In the subsequent postings, I have not seen anyone launching attacks or trying to pick fights.

I've seen two groups of postere -- one cautioning both the OP and innocent readers against trying sloppy Internet lawyering (the new equivalent to jailhouse lawyering), which will probably come back to haunt them. My posts have been along those lines, and my primary interest has been to caution others against following OP's very risky approach. (None of my posts were edited or deleted, BTW.)

The other group of posters have made legitimate (IMHO) comments on the rightness/wrongness of OP's actions...a moral/ethical issue which this kind of thread pretty much begs for. Those posts might have been controversial to some -- and may even have struck a raw nerve or two -- but the ones I saw were not adversarial.

If a poster starts a thread advocating unethical behavior and the DIS prohibits anyone addressing that unethical approach, the DIS is effectively supporting the bad actor, IMHO.

I don't see any point in removing posts just because they might present a different point of view. If we're not allowed to post anything beyond, "You go girl!" this won't be much of a "discussion" board.

I don't recall any posts which contained attacks or any other violations of DIS posting policies -- although it is certainly possible that some occurred and were removed before I saw them.

 

[CarolMN]

...(snip).....I don't recall any posts which contained attacks or any other violations of DIS posting policies -- although it is certainly possible that some occurred and were removed before I saw them.

Totally agree - it's certainly possible.