If you are sued by your bank for a debt or a loan, or if you are sued by a collection agency on behalf of a bank, what are your legal options for protecting your assets? The first step you take should be to schedule a consultation at once with an Oklahoma City asset protection attorney.
What do consumers in Oklahoma need to know about being sued by a bank? What steps can you take to protect your assets now, before a lawsuit has been filed? Is there any way to protect your assets after a bank has filed a lawsuit against you?
Keep reading this brief discussion of bank lawsuits and your rights under Oklahoma law, and you will find the answers you may need, but if you are named as the defendant in a bank lawsuit, you will also need personalized legal advice from an Oklahoma City asset protection lawyer.
What Are Default Judgments?
You cannot ignore a bank lawsuit. If you do not respond to the lawsuit and you take no action, the court may award the bank a default judgment, which means that the bank automatically wins the lawsuit. In fact, banks already presume that most consumers will not respond to a lawsuit.
About ninety percent of the consumers who are sued by banks fail to respond when a lawsuit is filed, so a bank usually does not have to do anything to win a judgment. Do not let that happen to you. With a default judgment, a bank can garnish your wages or place a lien on your home.
However, when consumers are represented by an asset protection attorney, it is more likely that a bank lawsuit will either be dismissed or settled for a fraction of the original amount of the claim.
Is Bankruptcy an Option?
Filing for bankruptcy automatically halts most debt collection proceedings including bank lawsuits. Thus, what’s called an “automatic stay” is an important benefit of filing for bankruptcy. The automatic stay immediately stops a bank lawsuit and any other legal action to collect a debt.
Bankruptcy entails serious financial consequences, and it is frankly a measure of last resort. A bankruptcy will remain on your credit report for up to ten years. The decision of whether to file for bankruptcy must be based on a thorough assessment of your personal financial situation.
Nevertheless, for some consumers, bankruptcy may be the only way to deal with a bank lawsuit. However, it is better if your attorney can negotiate privately with the bank for an out-of-court settlement that lets you pay back the bank over time and avoids the need to file for bankruptcy.
If a settlement is not possible and bankruptcy is genuinely your best option, an Oklahoma bankruptcy lawyer will guide you through the bankruptcy process, explain the requirements and consequences of your bankruptcy, answer all of your questions, and address all of your concerns.
How Can You Protect Your Assets Before a Lawsuit is Filed?
After a bank has filed a lawsuit against you, your options for protecting your assets are severely limited. You should take steps – beginning now – to protect your assets before a bank or any other creditor has any reason to file a lawsuit against you. It is important to be proactive.
After a bank brings a lawsuit that names you as the defendant, it is too late to prepare an asset protection plan. An Oklahoma City asset protection attorney will help you develop an effective plan, but you must put that plan into effect before a bank or a creditor brings a claim against you.
An effective asset protection plan puts protection in place before a lawsuit or a claim arises – protection that can dissuade a bank from suing you or prevent the bank from seizing your assets if it wins a judgment against you.
What Does an Effective Asset Protection Plan Entail?
Everyone’s financial circumstances are unique. There is no single one-size-fits-all strategy for protecting someone’s assets. You will need to make some complicated choices, and you will also need the personalized legal advice that an Oklahoma City asset protection lawyer provides.
An asset protection plan puts legal separation between you and your assets. Asset protection begins by transferring the unprotected legal ownership of your assets to a protected form of legal ownership such as an asset protection trust (APT) or a limited liability company (LLC).
What is an Asset Protection Trust?
Oklahoma is one of seventeen states (as of 2022) that allow for asset protection trusts. An APT is an irrevocable trust that can insulate your assets from bank lawsuits and other creditor claims. An APT shields assets from creditors, divorce settlements, and most types of lawsuits.
In Oklahoma, you can prepare an asset protection trust at an affordable cost with the assistance of an Oklahoma asset protection lawyer. Another asset protection option is establishing a limited liability company (LLC).
What is a Limited Liability Company?
An LLC is a business formation that shields the owners from personal responsibility for its liabilities or debts. Moving personal property and assets into an LLC is an effective asset protection strategy, particularly for landlords, real estate investors, and business owners.
An Oklahoma City LLC attorney can help you establish a limited liability company, help you document the transfers of your property and assets to the LLC’s ownership, and also advise you regarding the potential tax consequences of those transfers.
What Else Should You Know About Asset Protection?
As mentioned above, whether an APT, an LLC, or another asset protection strategy is right for you will depend on your personal financial circumstances. What’s important is to take steps now to protect your assets – before you are sued and before bankruptcy becomes your only option.
Schedule a consultation at once with an asset protection lawyer in Oklahoma City in order to:
- obtain legal advice and representation if a bank is suing you
- negotiate a settlement with a bank or another creditor
- file for bankruptcy
- establish an asset protection trust or a limited liability company
- learn more about any of these options
- review your current asset protection strategy
Legal help with asset protection is just one phone call away. Obtain that help by making the call promptly to an asset protection attorney, and start protecting your assets as quickly as possible.