RPF0605-Asset_Protection_Planning__-_Part_4_-_Understanding_the_Litigation_Process
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00:00:30.620 | Welcome to Radical Personal Finance,
00:00:32.120 | a show dedicated to providing you with the knowledge,
00:00:34.000 | skills, insight, and encouragement you need
00:00:36.100 | to live a rich and meaningful life now
00:00:38.200 | while building a plan for financial freedom
00:00:39.940 | in 10 years or less.
00:00:41.660 | Today, we continue part four of our
00:00:44.100 | Asset Protection Planning for Mere Mortals series.
00:00:47.680 | Part one, I laid out for you a very broad overview
00:00:50.080 | of asset protection planning,
00:00:51.620 | encourage you to consider the assets
00:00:53.220 | that are important to you and define the risks
00:00:55.840 | that those assets face,
00:00:56.960 | and then consider protection strategies very broadly.
00:00:59.960 | In part two, we talked about the morality and legality
00:01:02.700 | of asset protection planning,
00:01:03.760 | specifically here referring to financial assets
00:01:06.600 | and engaging in legal planning to make it harder
00:01:10.600 | for a creditor to collect against you.
00:01:12.500 | And I defended the idea that it is both legal and moral
00:01:15.240 | for you to make your assets hard to seize.
00:01:18.240 | And in episode part three of this series,
00:01:20.680 | I laid out for you the problem that we're protecting against.
00:01:23.520 | And the summary thesis of that show
00:01:26.220 | was simply it's not good enough for you to expect
00:01:28.820 | to be a prudent and careful person
00:01:31.000 | and think that you'll be okay
00:01:32.900 | if you're just a prudent, careful person.
00:01:34.900 | It's not good enough for you to simply trust
00:01:36.600 | the court system and say, "Well, if I'm wrong,
00:01:38.960 | "I don't mind paying for the things that I've gotten wrong,
00:01:41.240 | "and I can just trust that the judge and the jury,
00:01:43.100 | "if there's a jury involved,
00:01:44.500 | "they'll work out the details and I don't mind."
00:01:47.040 | It's not good enough.
00:01:48.480 | In today's world, that simply is,
00:01:50.680 | it's a fantasy to believe that you can just simply
00:01:53.920 | be prudent and that the courts will find justice.
00:01:56.180 | That's a fantasy.
00:01:57.020 | And so I sought to make that claim in part three.
00:02:01.420 | Today in part four, I'm going to talk to you
00:02:03.520 | about the overall litigation process
00:02:06.120 | to explain to you how the process works
00:02:08.000 | so that you understand the legalities involved
00:02:10.400 | in the process of litigation.
00:02:12.440 | The majority of asset protection planning
00:02:14.640 | that we're concerned about will involve a legal case.
00:02:18.800 | That's because in the United States,
00:02:20.940 | we're dealing in a society that's largely driven
00:02:24.240 | by rule of law.
00:02:25.580 | We're not so much concerned about somebody
00:02:27.580 | sneaking into your house, putting a gun to your head,
00:02:29.580 | and forcing you to open up your safe.
00:02:31.480 | That is a component of asset protection planning,
00:02:34.320 | and you should plan for that.
00:02:35.920 | But when I use the term, the understood common meaning
00:02:38.700 | of the term is not what kind of security system
00:02:41.160 | do you install around your compound?
00:02:43.520 | It's the common meaning of the term is,
00:02:45.900 | how do you protect it so that the person
00:02:47.640 | that you ran into at a stop sign and hurt their neck,
00:02:52.140 | how do you protect so that they don't take all your money?
00:02:54.780 | Because you slipped and pressed the gas
00:02:57.180 | when you were supposed to press the brakes.
00:02:58.940 | And so usually we're dealing here with a legal process.
00:03:01.580 | The legal process will be looked over
00:03:05.420 | and run by the judge, by a court system,
00:03:09.300 | and the process is fairly laid out.
00:03:10.700 | But this is a process that is generally opaque
00:03:12.500 | to most of us.
00:03:13.660 | For most of us, the first time that we come in contact
00:03:16.800 | with somebody who is seeking to take all of our money
00:03:20.780 | because they believe that we have wronged them
00:03:22.980 | is when the lawsuit is served,
00:03:24.940 | or when we first get an inkling of it.
00:03:26.540 | And that's the first time we're ever aware
00:03:29.580 | of how this legal process works.
00:03:31.740 | So I wanna explain it to you so that you understand it,
00:03:35.180 | and so that you can do the planning now
00:03:37.300 | that needs to be done in order to protect your assets.
00:03:42.940 | The first thing you need to hear very loud and clear
00:03:45.460 | in the beginning of today's show is,
00:03:47.920 | you must, in order for asset protection planning
00:03:50.640 | to be maximally effective,
00:03:52.560 | you must put in place the strategies
00:03:55.760 | that will shelter and protect your assets
00:03:58.640 | before anything happens
00:04:00.840 | that could lead somebody to file a claim against you
00:04:05.200 | or to bring a lawsuit against you.
00:04:07.000 | You need to actually put the structures in place
00:04:09.840 | before the facts occur.
00:04:13.320 | In the United States, and in most countries around the world
00:04:15.540 | or most listeners are based,
00:04:18.140 | there is a body of law that comes under the,
00:04:21.400 | label, heading, the heading of fraudulent transfer law
00:04:27.340 | or fraudulent conveyance law.
00:04:29.460 | Depending on what state you are in,
00:04:31.460 | it'll be referred to slightly different,
00:04:33.380 | but let's just call it the fraudulent transfer law.
00:04:36.020 | Fraudulent transfer law goes a long way back.
00:04:38.540 | And the simple idea is this.
00:04:40.720 | If I owe you money,
00:04:44.860 | let's say I owe you $1,000,
00:04:46.740 | and all I have is $1,000,
00:04:48.900 | I can't go over to my buddy on the backside of my house
00:04:52.060 | and say, "Hey, here neighbor, here's $1,000."
00:04:55.380 | And then when you come looking for your $1,000,
00:04:58.020 | I had to say, "I don't have it."
00:04:59.980 | And then you're just left empty-handed.
00:05:02.040 | Meanwhile, a week later, after you've gone on your way,
00:05:03.980 | I'll go back to my neighbor and say,
00:05:05.220 | "Hey buddy, how about sending me back over the 1,000 bucks
00:05:07.620 | and hey, here's $100 for your trouble."
00:05:11.160 | It simply can't do that.
00:05:12.320 | And so the US courts are empowered to protect against that.
00:05:17.320 | And judges have massive powers to make sure
00:05:20.880 | that a creditor is protected against you
00:05:25.600 | fraudulently taking the creditor's money
00:05:27.900 | and giving it somewhere else,
00:05:29.560 | trying to spend it yourself,
00:05:31.180 | wasting an asset or transferring an asset to somebody else.
00:05:34.540 | Now we can study this law,
00:05:35.660 | and I think I'll do an entire segment on it
00:05:37.840 | because you need to understand how it works
00:05:39.320 | and it's fairly well codified
00:05:41.920 | so that you can understand how to put it in place.
00:05:46.160 | But the key fact that most people miss
00:05:49.120 | in this planning is simply this.
00:05:51.340 | When we are trying to analyze
00:05:54.860 | any kind of fraudulent transfer, fraudulent conveyance,
00:05:58.420 | a person's or a claimant's creditor status
00:06:04.700 | occurs at the time that the facts occur,
00:06:08.960 | the facts that actually lead to the claim,
00:06:13.040 | not when the claim is asserted or the lawsuit is initiated.
00:06:16.680 | So pretend for a moment that I drive into you at a stop sign.
00:06:22.700 | You're sitting at a stop sign, minding your own business.
00:06:25.560 | I'm staring down at my phone, texting,
00:06:27.360 | and I drive into the back of your car
00:06:29.560 | and you hurt your neck.
00:06:32.680 | I can't go home after that accident
00:06:36.820 | and immediately start moving money
00:06:38.740 | and expect at that point in time
00:06:42.180 | that those transfers will be protected
00:06:45.540 | because you haven't sued me yet.
00:06:47.340 | It's the actual facts and the time that they occur
00:06:54.020 | that makes the difference on assets I can transfer.
00:06:57.380 | If a day before the accident,
00:06:59.260 | I happened to give my brother $100,000,
00:07:02.940 | and then the accident happens,
00:07:05.660 | and then all of a sudden we find out that,
00:07:07.820 | wow, that would actually turned out pretty well
00:07:09.560 | because you would have gotten
00:07:11.160 | that $100,000 out of me in court.
00:07:13.540 | Well, it's immaterial.
00:07:15.320 | It happened before the facts.
00:07:17.020 | But if the day after the accident occurs,
00:07:18.940 | I give my brother $100,000,
00:07:21.060 | now we have a serious problem
00:07:22.460 | 'cause a judge will reverse that transfer
00:07:24.780 | and a judge will force me to get the $100,000 back
00:07:27.500 | and to give it to you if, assuming in the end,
00:07:30.800 | that you win your lawsuit against me
00:07:32.140 | and I owe you $100,000.
00:07:33.860 | The Fraudulent Transfer Act covers the transfers
00:07:40.100 | and it's based upon the time that the facts occur,
00:07:45.340 | not when a case is filed.
00:07:48.900 | So you can't just sit around and say,
00:07:50.220 | well, I'll wait for a lawsuit
00:07:51.300 | or I'll wait and see what happens.
00:07:52.620 | You have to act today.
00:07:54.940 | Hope that's clear.
00:07:55.780 | Keep it in mind.
00:07:56.900 | Asset protection planning is one of the things
00:07:58.500 | that you have to do far in advance
00:08:00.580 | of ever needing it
00:08:02.040 | in order for it to be maximally effective.
00:08:05.160 | So what actually happens in a lawsuit?
00:08:08.680 | How does the actual process work
00:08:10.800 | between certain facts occurring,
00:08:13.440 | the company manufacturing and selling the faulty product,
00:08:17.860 | the surgeon slipping and botching a surgery,
00:08:22.060 | the individual walking down the street
00:08:24.480 | or driving their car and accidentally
00:08:27.400 | running somebody over, running over a child?
00:08:30.360 | Well, how does this process work
00:08:31.960 | between the time of the incident occurring
00:08:34.880 | and you actually forking over your money
00:08:37.460 | to the person who wins a lawsuit against you?
00:08:39.940 | Well, we begin rather obviously with a situation occurring,
00:08:45.000 | the facts, the certain events happening,
00:08:48.400 | whatever those events are.
00:08:50.400 | And in the wake of those events,
00:08:51.880 | the person involved in those events
00:08:53.840 | or the people involved or the company involved
00:08:56.360 | will do an analysis of those events.
00:08:57.920 | And at some point in time, they'll think,
00:08:59.720 | hey, you know what?
00:09:00.560 | I have a legal case here.
00:09:02.400 | I'm gonna sue so-and-so for wronging me.
00:09:05.320 | I'm gonna sue this company for wronging me.
00:09:08.300 | And at that point in time,
00:09:10.640 | they will start to do an economic analysis of the case.
00:09:15.640 | Let's start with the simplest form of economic analysis,
00:09:19.400 | wherein a plaintiff,
00:09:22.280 | the person who's bringing the lawsuit,
00:09:24.320 | a plaintiff or a potential plaintiff
00:09:26.000 | is simply going to hire an attorney.
00:09:28.920 | You come into my place of business
00:09:32.120 | and you wrong me in some way.
00:09:33.960 | And I say, I'm gonna sue you.
00:09:35.480 | I go to my attorney that I work with
00:09:37.320 | and I say to this attorney,
00:09:38.440 | we're gonna sue this person over here.
00:09:40.960 | And I just want you to sue them for this reason,
00:09:43.120 | such and such, and I'll just simply pay your fees.
00:09:45.800 | Well, this is called an hourly fee basis
00:09:48.800 | of hiring an attorney.
00:09:49.960 | And many attorneys, most attorneys will work this way.
00:09:53.120 | You pay them a stated hourly fee for their work.
00:09:55.160 | They will bill you.
00:09:56.240 | They'll bill you for their time.
00:09:57.360 | They'll bill you for their paralegals' time.
00:09:58.800 | They'll bill you for their costs incurred.
00:10:00.960 | Those bills will range usually from a few hundred dollars
00:10:03.440 | an hour at the lowest to several thousand dollars an hour
00:10:06.120 | for the highest and highest priced attorneys out there.
00:10:11.120 | Well, in this situation,
00:10:12.040 | I'm going to have to search my budget
00:10:14.600 | and decide how much am I willing to pay
00:10:18.120 | this attorney in fees,
00:10:20.680 | especially given the likelihood of winning a case
00:10:25.680 | or of achieving a settlement,
00:10:28.000 | basically of getting money out of you.
00:10:31.480 | How much am I willing to pay?
00:10:34.780 | Now, there are some people who will use attorneys
00:10:38.480 | as part of an overall business strategy.
00:10:40.720 | That's beyond the scope of what we're doing today.
00:10:46.040 | Let's assume people are pragmatic.
00:10:49.280 | The most important thing to recognize
00:10:50.760 | is when somebody is simply paying hourly fees
00:10:53.240 | to their legal counsel,
00:10:56.280 | they're going to be thinking about
00:10:57.840 | what am I actually gonna get out of this?
00:10:59.880 | Consider it like this.
00:11:02.580 | You drive a nice, fancy car,
00:11:07.800 | and your car is parked in the parking lot outside your work.
00:11:12.480 | And the local bum,
00:11:13.920 | pushing their shopping cart full of all their possessions,
00:11:16.840 | comes into that parking lot
00:11:18.280 | and mistakenly scratches your car and messes it up.
00:11:22.100 | Somehow the wind is a gust of wind
00:11:24.440 | and it blows the whole heavy shopping cart
00:11:26.920 | into the side of your car and makes a nice big dent.
00:11:29.560 | You rush out furious and say,
00:11:32.600 | "Listen, bum, you messed up my car."
00:11:35.600 | And the bum says, "Sorry,"
00:11:36.960 | and grabs the cart and shuffles away.
00:11:39.920 | Now, compare that to, you know,
00:11:44.280 | wealthy person driving a fancy car,
00:11:46.600 | pulls into the car,
00:11:47.440 | accidentally backs into your car and causes problems.
00:11:50.120 | The bum, you're not gonna be very incentivized.
00:11:54.040 | What are you gonna do,
00:11:54.880 | chase them down and take their shopping cart
00:11:57.200 | and list it on eBay so that you can come up with 32 cents
00:12:00.160 | to try to paint your car?
00:12:01.160 | It's absurd.
00:12:02.460 | They don't have money,
00:12:03.320 | and so you're not gonna pursue that very far.
00:12:06.480 | But you would pursue your claim
00:12:08.000 | against the wealthy person who's driving a nice car,
00:12:11.480 | you would pursue it until you're satisfied,
00:12:13.520 | until your car is made right.
00:12:15.080 | You would pursue it, of course, informally,
00:12:16.640 | in that silly little case I made up.
00:12:18.960 | You would pursue it informally.
00:12:20.240 | You might pursue it through the insurance company,
00:12:21.720 | but if nothing happened,
00:12:22.600 | you might be even willing to pursue it in a court of law,
00:12:24.680 | take it to small claims court and say,
00:12:25.880 | "Listen, this guy backed into my car,
00:12:27.760 | and he needs to make it right and fix it."
00:12:30.840 | So you, as a person,
00:12:34.100 | you will do an analysis, an economic analysis,
00:12:36.600 | and decide how much am I willing to pay
00:12:38.720 | this particular attorney.
00:12:40.640 | Now, the other way that attorneys take on clients
00:12:42.520 | is with what's called a contingency fee.
00:12:44.680 | And in a contingency fee,
00:12:46.240 | the attorney is not going to charge you by the hour.
00:12:50.200 | Rather, they're going to specify a fee
00:12:53.160 | that's based upon a percentage
00:12:55.480 | of any money they can recover for you.
00:12:58.520 | Usually that's perhaps a third of the money
00:13:01.880 | the case settled before trial,
00:13:03.680 | and about 40% if it goes to trial, something like that.
00:13:07.000 | So now the attorney is involved.
00:13:11.040 | And since usually only large companies
00:13:13.440 | or very wealthy people can actually afford
00:13:15.760 | to pay an attorney on an hourly basis,
00:13:18.240 | most of the types of lawsuits
00:13:19.840 | that you and I might be subject to
00:13:21.920 | are going to be handled on a contingency fee.
00:13:24.580 | Now, in this case, the plaintiff,
00:13:27.000 | the person who has the actual fact
00:13:29.400 | that they're concerned with,
00:13:30.640 | will take those facts to an attorney
00:13:32.360 | and will lay them out for the attorney.
00:13:33.920 | And the attorney is going to be involved
00:13:36.040 | in the economic analysis.
00:13:38.140 | Because the attorney is going to front the money,
00:13:41.680 | and the attorney is going to front all the money
00:13:43.160 | for the depositions, the legal costs, et cetera,
00:13:45.360 | all along the way.
00:13:46.280 | And they're going to invest many hours of their time
00:13:48.760 | hoping for the big payoff.
00:13:50.280 | And so they're first going to analyze the case
00:13:52.960 | to see does the case have merit?
00:13:54.720 | And is there some way I can help the case to have merit?
00:13:57.600 | Is there some way that I can create a case here
00:14:00.000 | that I think will stick, that based upon the facts,
00:14:02.200 | as they've actually occurred,
00:14:03.600 | that will help me to actually win the ultimate judgment?
00:14:08.600 | And of course, the attorney might investigate those facts.
00:14:12.840 | They might investigate, hire somebody,
00:14:14.840 | do some initial investigation to figure it out.
00:14:17.200 | But the attorney is also going to engage
00:14:18.900 | an economic analysis.
00:14:20.480 | And they're going to try to figure out what's in it for me.
00:14:23.120 | How am I going to make this thing work out?
00:14:25.700 | In order for the case to work out,
00:14:29.220 | the attorney and the plaintiff have to find somebody
00:14:33.040 | who might actually be able to pay.
00:14:36.740 | You might desperately want the bum with the shopping cart
00:14:40.440 | to fix your car.
00:14:42.520 | Sorry, the bum's not going to do it.
00:14:45.040 | They don't have the money.
00:14:46.720 | And so legal cases are much like that.
00:14:48.880 | Somebody might want economic satisfaction
00:14:51.960 | for the wrong that they have suffered.
00:14:54.440 | But unless they can find somebody with money,
00:14:55.960 | there's a good chance that's not going to happen.
00:14:58.680 | And so it's very likely that the attorney
00:15:01.960 | is going to hire somebody to do an asset search,
00:15:05.800 | a financial investigation on the potential claimant,
00:15:09.840 | or the, sorry, the potential defendant,
00:15:12.360 | on the potential people that they could name in the lawsuit.
00:15:16.000 | Now, this is a fairly standardized process
00:15:18.760 | for some private investigators
00:15:20.240 | who specialize in this type of work.
00:15:22.120 | I have an interest in it.
00:15:23.160 | I've studied a bunch of the techniques that they use.
00:15:25.980 | There are some techniques that are entirely simple
00:15:28.960 | and easy and honest and legal.
00:15:33.120 | There are techniques that are shady and illegal,
00:15:36.640 | but are still done all the time, every day.
00:15:40.240 | And so somebody will do a financial asset search for you.
00:15:43.160 | And they'll try to create a profile
00:15:45.000 | of how much money you and other people have
00:15:47.760 | so that they can understand if you're worth suing.
00:15:50.680 | And depending on what's actually found out
00:15:53.240 | as a result of that financial asset investigation,
00:15:56.840 | that will probably influence
00:15:59.040 | how the lawsuit is pressed forward.
00:16:02.300 | Again, only the wealthiest of people
00:16:04.280 | or the wealthiest of companies
00:16:05.520 | are simply going to pay an attorney an hourly fee
00:16:07.580 | to sue you regardless of their potential to collect.
00:16:10.880 | People are generally, in this case, generally pragmatic.
00:16:15.880 | And if they don't think they're gonna collect money,
00:16:17.520 | then what's the point of spending thousands and thousands
00:16:19.600 | and tens of thousands of dollars to pursue a legal case?
00:16:22.480 | Now, this is one of your first methods of protection,
00:16:27.480 | and that's privacy around your assets.
00:16:32.260 | Depending on the amount of target that's laid on you,
00:16:37.160 | it may or may not be at all possible
00:16:40.280 | for you to have total privacy around your assets.
00:16:44.280 | I'll talk more about financial privacy,
00:16:47.200 | but the thing you must realize is
00:16:49.120 | if the incentive is high enough,
00:16:52.000 | somebody could ultimately, if they're willing to pay,
00:16:55.040 | somebody could ultimately find out
00:16:56.440 | about just about everything you do.
00:16:57.760 | So you can never rely on privacy.
00:17:00.800 | You might have a magnificent house
00:17:04.080 | that you hold in a private trust
00:17:05.880 | that nobody could prove that you live there.
00:17:08.360 | But if somebody follows you home from your office
00:17:10.440 | and a private investigator tails you home,
00:17:12.840 | then they can start to figure out,
00:17:14.720 | oh, that's where so-and-so lives.
00:17:16.180 | Now I understand where they live.
00:17:18.100 | You might, I'll skip all the other examples for now,
00:17:20.920 | but privacy is an important first strategy
00:17:24.500 | because it helps to protect you at this stage
00:17:26.480 | of the financial investigation and the litigation process,
00:17:31.020 | but it's not the ultimate thing.
00:17:32.600 | You can never rely just on privacy.
00:17:36.200 | If a financial investigator
00:17:38.840 | is unable to locate significant assets,
00:17:42.320 | doesn't mean they don't exist,
00:17:43.200 | but if they can't locate significant assets,
00:17:46.240 | then there's a very good chance
00:17:47.840 | that the lawsuit will never proceed past this point.
00:17:50.480 | There's a good chance that the attorney will say
00:17:54.560 | to the plaintiff, listen, I'd like to take the case,
00:17:57.640 | but I'm not gonna take it on a contingency fee basis,
00:18:00.280 | but I'd be happy to take it on an hourly basis.
00:18:02.760 | Well, very few plaintiffs would have
00:18:04.160 | the tens of thousands of dollars
00:18:05.860 | to be able to agree to paying an attorney their hourly fees.
00:18:09.680 | So this would substantially narrow
00:18:12.960 | the number of potential plaintiffs
00:18:14.280 | that would bring a case against you.
00:18:16.400 | But if substantial assets are located,
00:18:20.120 | then there's a good chance that a lawsuit,
00:18:21.880 | regardless of its legal merits, will be filed against you.
00:18:24.980 | So this is the pre-filing stage
00:18:29.060 | where there's a financial economic analysis
00:18:32.240 | and a financial investigation that comes into your affairs.
00:18:37.240 | Now, if the attorney and the plaintiff
00:18:38.560 | can come to an agreement,
00:18:40.240 | we move into the actual filing of the lawsuit.
00:18:44.200 | In this case, a complaint is prepared,
00:18:45.960 | and that complaint is filed with the local court.
00:18:48.720 | And the key thing to recognize here
00:18:51.960 | is the complaint doesn't have to have all the details.
00:18:56.600 | The lawsuit doesn't actually have
00:18:58.240 | to have all the details.
00:18:59.960 | After the lawsuit is filed,
00:19:01.280 | you move into a discovery phase
00:19:02.600 | where the case will come out.
00:19:05.140 | The complaint itself, at times, can be somewhat vague,
00:19:08.360 | and it may not have all the facts behind it.
00:19:10.560 | Just because you've been careful in all your dealings
00:19:12.780 | doesn't mean that somebody can't file a complaint
00:19:14.920 | and you be called in to defend yourself.
00:19:17.960 | Just because somebody's lawsuit is,
00:19:20.880 | I'm avoiding the use of the word frivolous,
00:19:23.360 | but is not exactly strong
00:19:25.880 | doesn't mean you might not wind up in a situation
00:19:29.280 | of spending lots of money on legal help to defend yourself
00:19:33.360 | and spending lots of time and stress to do so.
00:19:36.900 | At this stage of the legal procedure,
00:19:40.440 | there is a possibility in some cases
00:19:44.360 | that a plaintiff can have a pre-judgment writ of attachment
00:19:49.160 | produced by the court,
00:19:51.460 | which will effectively freeze some of your assets.
00:19:55.600 | This is not a tool that's available
00:19:58.480 | in all or even most cases.
00:20:01.480 | It's available only, usually, in cases
00:20:04.520 | that are related to specific contracts,
00:20:07.880 | commercial contracts.
00:20:09.560 | The claims need to be specific,
00:20:11.600 | and there needs to be a good ability
00:20:14.380 | for the plaintiff to show the judge,
00:20:16.360 | hey, there's a good chance, if this goes to trial,
00:20:19.520 | that I'm gonna win.
00:20:20.360 | But in some cases, the judge will actually issue
00:20:23.240 | a pre-judgment writ of attachment,
00:20:24.880 | which will effectively freeze your assets.
00:20:27.040 | If it's issued against real estate that you own,
00:20:29.120 | that real estate can't be sold or financed
00:20:31.960 | once that writ has been filed against it.
00:20:35.020 | If it's against money that you have in a bank account,
00:20:37.860 | that money can't be spent.
00:20:39.080 | It can't be withdrawn.
00:20:39.920 | It can't be moved.
00:20:41.400 | So there is a legal judgment
00:20:43.080 | or a legal option available at this stage,
00:20:46.580 | but it would be more unusual, and it's not available
00:20:49.560 | unless somebody's alleging negligence against you.
00:20:52.660 | Then we move into the discovery phase.
00:20:54.240 | And the discovery phase of a lawsuit
00:20:55.880 | is where each side in a lawsuit,
00:20:58.640 | the plaintiff and the defendant,
00:20:59.920 | are able to try to probe one another,
00:21:03.600 | the information that each of them has,
00:21:05.200 | and build their various cases against one another.
00:21:08.120 | And those cases come from asking questions of one another,
00:21:11.440 | interrogatories, written questions,
00:21:13.380 | comes from interviews and interrogations, depositions.
00:21:18.380 | It comes for the request for production of documents.
00:21:23.020 | And this can, depending on the lawyer and the strategies,
00:21:25.760 | can be used even part of a legal strategy.
00:21:27.400 | For example, somebody may ask
00:21:29.400 | for so much information from you
00:21:31.280 | that they're just trying to bury you in work
00:21:34.080 | that you have to produce for them
00:21:35.840 | so that you might be inclined
00:21:37.360 | to make them a settlement offer early on
00:21:39.400 | to try to avoid the hassle.
00:21:41.760 | Sometimes, however, these details
00:21:44.520 | are just simply a normal part
00:21:45.720 | of collecting the facts of the case.
00:21:48.540 | There are massive potential sources of information
00:21:53.320 | that an attorney could seek to exploit
00:21:56.240 | if they could demonstrate
00:21:57.280 | that it is connected to their case.
00:22:00.080 | One of the defensive plans,
00:22:04.240 | I'll come back to defensive plans at a later date.
00:22:07.760 | So this is the, later in the show,
00:22:10.680 | this is the discovery phase.
00:22:12.500 | Then if the case is not settled before trial,
00:22:17.000 | which of course many lawyers would seek to do,
00:22:19.800 | the case is not settled before trial
00:22:21.080 | and the case will go to the actual trial.
00:22:24.200 | If the case goes to trial,
00:22:25.360 | then the facts of the case are tried
00:22:27.880 | and a verdict is reached.
00:22:29.680 | If the verdict comes against you,
00:22:32.640 | then a judgment is produced by the court against you.
00:22:37.600 | And the judgment legally authorizes your creditor,
00:22:42.600 | the person that you've lost the case against,
00:22:44.920 | now your creditor,
00:22:46.080 | your creditor to collect the money or the assets from you
00:22:50.520 | to satisfy the judgment
00:22:51.720 | and the amount that the court has awarded to them.
00:22:54.760 | Now they've got to find your assets.
00:22:56.800 | And at this point in time,
00:22:57.860 | you have one of the most powerful tools
00:22:59.920 | that a creditor can have,
00:23:01.520 | which is the ability to force you
00:23:04.560 | to take a debtors examination.
00:23:07.120 | And in the beginning of the lawsuit process,
00:23:13.560 | the plaintiff has no legal ability
00:23:17.200 | to force you to say anything about your assets.
00:23:19.880 | The attorney, as I said earlier,
00:23:21.480 | could hire a private investigator,
00:23:23.680 | but that private investigator has no legal ability
00:23:26.080 | to walk into your office and say,
00:23:27.280 | "How much money do you have and where is it?"
00:23:29.140 | They're looking through public records,
00:23:31.120 | they might be doing surveillance,
00:23:33.640 | they might go and search through
00:23:35.760 | to try to find what you own,
00:23:37.560 | they might have some underhanded and illegal methods,
00:23:40.540 | some sources at the banks
00:23:41.640 | to find out how much money you have in the bank, et cetera.
00:23:44.160 | But at the end of the day,
00:23:45.160 | they don't have any legal tools against you.
00:23:47.240 | But a debtors examination changes all that.
00:23:50.300 | Because now you will be asked
00:23:52.360 | to make a list of all of your assets,
00:23:55.600 | to say what you own, where it is,
00:23:58.760 | how much it's worth in great detail.
00:24:02.440 | You can also be asked
00:24:03.480 | if you've made any transfers of money,
00:24:05.520 | if you gave money away before the lawsuit
00:24:07.640 | at any point in time.
00:24:08.960 | And a debtors examination is forced upon you under oath,
00:24:13.960 | where you have to give true and complete answers.
00:24:17.560 | And if you fail to give true and complete answers
00:24:19.700 | to those questions,
00:24:20.980 | you run the risk of committing a felony offense,
00:24:25.560 | which is very, very serious.
00:24:27.800 | So basically, you should always plan
00:24:30.940 | that in a debtors examination,
00:24:32.500 | you're always going to be listing everything that you own
00:24:36.000 | so as to avoid committing a felony.
00:24:38.040 | Remember, here at Radical Personal Finance,
00:24:40.160 | we don't ever want to commit felonies
00:24:41.820 | because those limit our freedom significantly.
00:24:45.120 | So I want you to live your life very carefully
00:24:48.280 | to avoid committing any felonies,
00:24:50.320 | and then understand how to conduct your life very carefully
00:24:54.280 | so that even any accusations of any felonies
00:24:57.440 | completely fall aside.
00:24:58.640 | And it starts by telling the truth.
00:25:01.040 | So in that debtors exam,
00:25:03.160 | then the creditor finds out about the assets.
00:25:05.640 | And then at that point in time,
00:25:07.280 | then the court can actually issue a writ of execution,
00:25:10.280 | which authorizes the sheriff or whoever,
00:25:14.120 | the appropriate law enforcement authorities are
00:25:17.760 | to take possession of your properties.
00:25:20.000 | They can force the sale of a house,
00:25:22.560 | they can seize assets from a bank,
00:25:25.000 | they can seize physical property,
00:25:26.840 | the sheriff can come and collect certain physical property.
00:25:29.440 | And then that property or money is turned over
00:25:36.160 | to the creditor to satisfy the judgment.
00:25:39.280 | Now, there's some interesting texture
00:25:40.640 | that we could talk about all those topics more,
00:25:43.460 | but that's the basic process,
00:25:44.920 | the basic legal process that you will be subject to.
00:25:49.040 | Now, let's briefly give an overview
00:25:51.720 | of some of the different strategies that will be involved
00:25:54.480 | in your overall asset protection planning.
00:25:59.480 | The first thing that you want to be careful of
00:26:02.120 | is always be careful to be prudent in all of your conduct
00:26:06.840 | and all of your actions.
00:26:08.920 | So you know, you need to always be careful
00:26:11.520 | to try to minimize anything that would give cause,
00:26:14.720 | give rise to a potential claim against you.
00:26:17.680 | And then also to minimize anything
00:26:19.320 | that would give anybody a legal case against you.
00:26:22.520 | So if you need to shovel the snow or salt
00:26:25.360 | or sand the sidewalk so it's not icy,
00:26:27.880 | go out and do it so that somebody doesn't come along
00:26:30.420 | and slip and fall, that's the right thing to do.
00:26:33.040 | Don't text and drive, pay attention to your driving
00:26:35.760 | so you don't run into somebody at a stop sign.
00:26:38.320 | Be prudent in all of your actions, be careful
00:26:41.400 | so that you can minimize the facts
00:26:43.540 | that occur in the first place.
00:26:45.600 | In life, many of these things
00:26:47.320 | are just simple split-second decisions.
00:26:50.200 | But if you'll take the careful decision,
00:26:53.240 | then you can minimize massive opportunities.
00:26:56.120 | Let me just repeat, you know, texting and driving
00:26:59.000 | has about the same impact, my understanding
00:27:02.600 | of the data shows that it has about the same impact
00:27:04.880 | as drunk driving.
00:27:06.800 | Now, very few of us would go and drunk drive,
00:27:09.440 | but how many of us are guilty of texting and driving?
00:27:12.440 | So just simply choose not to.
00:27:14.680 | And that's a simple choice that you and I can do,
00:27:17.600 | but it's a simple choice that could have profound benefits,
00:27:22.600 | financial and otherwise.
00:27:24.480 | I mean, just imagine the horror of running into somebody
00:27:28.240 | and killing somebody because you weren't paying attention.
00:27:31.880 | Imagine the horror of that on your conscience,
00:27:35.200 | let alone the financial implications to your wealth.
00:27:40.300 | So always be prudent, be prudent, be careful.
00:27:44.520 | And if you'll implement a lifestyle of prudence
00:27:47.320 | and carefulness, then you can probably avoid
00:27:50.800 | many of the facts that might arise.
00:27:55.840 | And then if those facts arise, you can put the strength
00:27:59.480 | of the evidence on your own side.
00:28:01.960 | So that's the obvious first thing that you always
00:28:04.760 | have to consider before any facts occur,
00:28:07.800 | be prudent and be careful.
00:28:10.120 | Now, what about at other stages of this process?
00:28:14.720 | It's good for you if possible to appear
00:28:17.680 | to be utterly financially bankrupt
00:28:20.080 | to the greatest extent possible.
00:28:22.380 | Now, of course, this may affect some of the lessons
00:28:24.800 | you're trying to teach others,
00:28:25.960 | this may affect your standing in the community,
00:28:27.720 | but just simply from a kind of an extreme example,
00:28:31.560 | if you could simply appear to be bankrupt at all times,
00:28:35.640 | that would minimize your vulnerability.
00:28:41.000 | So how could you do that?
00:28:42.220 | Well, we'll talk about some of those strategies.
00:28:45.080 | We'll talk about things like equity stripping,
00:28:47.080 | where you strip equity out of visible assets
00:28:50.320 | and put it into invisible assets.
00:28:53.040 | But that's one of the most important
00:28:55.520 | asset protection planning strategies
00:28:57.000 | is always equity stripping.
00:28:58.420 | But if you could just simply look bankrupt at all times,
00:29:01.440 | that would help to protect you from lawsuits
00:29:03.800 | because you eliminate massive numbers
00:29:06.480 | of potential plaintiffs.
00:29:07.960 | You know, the attorney hires the private investigator,
00:29:09.840 | private investigator come back and says,
00:29:11.680 | "This dude doesn't have any money.
00:29:13.920 | You know, he lives in this house,
00:29:15.520 | but the house has a giant mortgage on it.
00:29:18.000 | He's spending money like crazy trying to impress
00:29:20.320 | all of his friends, he's totally bankrupt.
00:29:22.000 | If he filed today, you wouldn't gain a thing against him."
00:29:25.320 | Well, that can avoid even many lawsuits being filed.
00:29:27.960 | And it also puts the strength on your side as well
00:29:32.920 | of being able to protect yourself and just simply say,
00:29:35.040 | "Hey, I don't have a lot of assets."
00:29:37.520 | So you want to appear to be financially bankrupt
00:29:39.840 | to the greatest extent possible.
00:29:41.200 | And you wanna have maximum privacy around your affairs.
00:29:44.400 | Somebody could try to look into you and say,
00:29:46.760 | look into your money and say,
00:29:47.600 | "Well, I don't know, they might have money,
00:29:50.680 | but I sure can't find it."
00:29:52.720 | That also can be an effective strategy.
00:29:54.760 | So that's kind of an extreme, extreme case.
00:29:57.520 | Now, if assets are located, and again,
00:30:00.960 | remember, if you lose a lawsuit, if assets are located,
00:30:04.800 | you want those assets to be totally unreachable by creditors.
00:30:09.800 | Most common theory here is exemption planning.
00:30:12.680 | So if you have money,
00:30:15.040 | but you have a million dollars in your 401k,
00:30:17.360 | and you have no other money,
00:30:20.400 | the creditor is not gonna be able to collect against that.
00:30:23.040 | So kind of an ultimate perfect scenario
00:30:26.720 | is if assets are ever located,
00:30:28.920 | then you want them to be totally unattachable,
00:30:31.520 | unreachable by your creditors.
00:30:35.080 | You can accomplish that with simple mundane things,
00:30:38.200 | exemption planning, homesteading a property,
00:30:42.400 | life insurance may be exempt in your state,
00:30:46.160 | annuity assets may be exempt in your state,
00:30:48.120 | your ERISA-governed qualified plans,
00:30:50.560 | your 401ks, 403bs may be exempt in your state,
00:30:54.040 | or it might be with very exotic,
00:30:56.320 | an offshore asset protection trust
00:30:59.800 | down on the Cook Islands.
00:31:01.240 | So yes, you have money, but it's,
00:31:03.720 | again, it's in an offshore asset protection trust
00:31:05.960 | down on the Cook Islands,
00:31:06.840 | and that trustee is never, ever going to comply
00:31:10.160 | with the US courts, first and foremost.
00:31:12.200 | If they wanna sue you,
00:31:13.040 | they gotta sue you in the Cook Islands,
00:31:14.120 | and the trustee's never gonna make a distribution.
00:31:16.160 | So if assets are locatable,
00:31:18.920 | and something comes against you,
00:31:22.520 | then you want those assets to be utterly unreachable
00:31:26.120 | by your creditors.
00:31:27.160 | And then finally, the next stage is,
00:31:29.320 | if assets are locatable and reachable,
00:31:33.000 | attachable by your creditors,
00:31:34.880 | you want them to be toxic to those creditors.
00:31:39.160 | So if possible, you want to,
00:31:40.560 | in very sophisticated asset protection planning,
00:31:43.080 | you wanna lay a trap to the creditors,
00:31:45.520 | where yes, they can have this LLC member interest
00:31:50.520 | that you own,
00:31:51.520 | they receive the interest,
00:31:55.040 | but you set a trap so that if they receive the interest
00:31:58.640 | in this foreign LLC,
00:32:00.680 | which is entangled with the trustee
00:32:05.040 | in your offshore trust,
00:32:06.400 | they receive the interest,
00:32:07.480 | but now the manager of that LLC
00:32:10.800 | chooses not to make distributions
00:32:12.760 | to that particular member
00:32:14.760 | because of what you've put in the LLC,
00:32:17.400 | and now you lay a trap
00:32:19.440 | so that the person has phantom income.
00:32:21.720 | And so now your creditor
00:32:23.080 | is receiving an LLC member interest,
00:32:25.400 | and they're entitled to all the distributions,
00:32:27.480 | but the manager of the LLC is not making distributions
00:32:30.320 | to that particular LLC member,
00:32:33.680 | but now they are reporting to the IRS
00:32:36.800 | what that LLC member's share of the profits are,
00:32:39.840 | and so now your creditor owes a tax bill.
00:32:42.320 | You can do that.
00:32:43.760 | You can set it up so that if they own the LLC interest,
00:32:47.120 | then they receive the tax bill for phantom income.
00:32:49.720 | They never received any income,
00:32:51.160 | but now they owe the IRS,
00:32:52.440 | and that can make that asset toxic to the creditor
00:32:55.680 | and can possibly persuade them
00:32:57.560 | to engage in a post-judgment settlement,
00:33:00.040 | where now you say, "Hey, listen,
00:33:01.840 | "you have this judgment here of a million dollars,
00:33:04.360 | "and you've got this LLC.
00:33:06.000 | "You executed a charging order
00:33:07.840 | "against this member interest, and you own it,
00:33:10.080 | "but now you're getting a tax bill for $40,000 a year.
00:33:13.400 | "Why don't we settle this, and I'll come up with,
00:33:16.080 | "and I'll pay you $300,000,
00:33:18.680 | "and then you surrender this judgment
00:33:20.280 | "that you have against me for a million dollars."
00:33:22.120 | And then you can possibly enter
00:33:23.560 | into post-judgment negotiations and settle your case.
00:33:26.560 | So that's kind of a dream world
00:33:27.960 | if we had everything as perfect
00:33:29.840 | as I can personally imagine it to be.
00:33:31.720 | Maybe you find that fun.
00:33:34.480 | I always like to start with what's the perfect,
00:33:36.840 | and then how close can I get to that practically
00:33:39.800 | given my actual situation?
00:33:41.560 | But that is how you protect yourself.
00:33:44.720 | Be cautious and prudent in your activities.
00:33:48.240 | Appear to be financially bankrupt
00:33:50.880 | to the greatest extent possible,
00:33:52.440 | and/or have as much absolute privacy
00:33:55.080 | so that your financial assets are unlocatable.
00:33:57.520 | If any assets are located,
00:33:59.360 | make sure they're unreachable by your creditors
00:34:01.800 | by carefully putting up firewalls
00:34:04.360 | between those assets and other assets,
00:34:06.280 | by carefully bringing in legal protection
00:34:08.360 | for those assets with various strategies.
00:34:11.400 | If assets are reached ever,
00:34:13.240 | they're located, they're reached,
00:34:14.840 | then ultimately try to make sure
00:34:16.760 | that they're toxic to the creditors, if at all possible.
00:34:20.520 | That will help you.
00:34:21.360 | Two other points of defense,
00:34:22.400 | and then we'll close out today's show.
00:34:24.760 | You wanna make sure that you at all times
00:34:28.760 | think carefully about your legal case as well,
00:34:31.640 | which is why you always want to be prudent in your affairs.
00:34:35.240 | Make sure that you,
00:34:38.680 | if you are supposed to be doing something legally, do it.
00:34:43.080 | If you're supposed to have good books and records
00:34:44.880 | for your corporation and take annual minutes, do that.
00:34:48.000 | If you're supposed to have an annual meeting, do it.
00:34:49.800 | Make sure that you actually properly manage something,
00:34:52.720 | because it would be stupid for you
00:34:54.800 | to go through all the work and hassle
00:34:56.400 | of setting up a well-run corporation,
00:34:59.680 | and then by commingling your assets,
00:35:02.520 | you give the judge everything they need to do,
00:35:05.480 | just simply pierce the corporate veil,
00:35:06.960 | and boom, everything falls apart.
00:35:09.160 | So do the things that you need to do.
00:35:11.120 | Legally protect yourself.
00:35:12.960 | Don't keep around mountains and mountains of stuff.
00:35:16.800 | Don't keep around long histories
00:35:18.800 | and tens of thousands of emails.
00:35:20.320 | If you're required legally in your industry
00:35:21.920 | to retain emails, great, but if not, get rid of that stuff.
00:35:24.800 | Don't keep long records.
00:35:26.480 | Don't keep messy computers with all kinds of stuff on those.
00:35:30.920 | Keep your devices encrypted.
00:35:32.720 | Make sure that you securely delete
00:35:34.320 | and completely eliminate the files.
00:35:36.320 | Don't create stuff that could cause problems
00:35:39.360 | for you in discovery, because you will hang yourself
00:35:42.720 | if you're not careful with that.
00:35:44.640 | So make sure that you do that.
00:35:46.000 | Keep your communications records cleared and purged.
00:35:50.800 | There's no reason for you to have a year's worth
00:35:53.960 | of text messages with people.
00:35:55.280 | There's no reason for all those things.
00:35:57.200 | So think defensively and eliminate all of the stuff
00:36:01.720 | that could come against you in a legal trial.
00:36:05.360 | That's always in your best interest,
00:36:06.640 | whether you're doing something wrong or not.
00:36:09.080 | I'm not even, just do the right thing,
00:36:10.840 | but there's just no reason to maintain
00:36:13.200 | all these extensive files,
00:36:14.680 | and there's no reason to maintain them
00:36:16.520 | in a way that could sink you.
00:36:18.320 | Just always imagine this.
00:36:20.560 | Somebody walks in, whether it's a law enforcement official
00:36:23.960 | or whether it is a law enforcement official
00:36:28.960 | or a deposition, somebody walks in and says today,
00:36:33.240 | we are subpoenaing your, that's not the right word.
00:36:37.040 | We're seizing your computer.
00:36:38.520 | We're seizing your computer,
00:36:41.840 | and we're gonna do a forensic analysis of it.
00:36:44.880 | We're gonna pull every file off of it.
00:36:46.780 | Could that cause you problems?
00:36:50.080 | If so, fix it today.
00:36:52.480 | Or we're seizing your cell phone.
00:36:54.040 | Could that cause you problems?
00:36:55.080 | If so, fix it today.
00:36:56.680 | Some point, maybe I'll do a whole show on that,
00:36:58.200 | but it's one of the biggest weaknesses
00:37:00.640 | that most people have is we don't do a good job
00:37:02.800 | with controlling our data,
00:37:04.280 | but make yourself a tough opponent in a lawsuit.
00:37:07.640 | Good asset protection planning
00:37:10.600 | will protect you at every phase,
00:37:13.760 | and that's why it's so important.
00:37:15.560 | Be tough.
00:37:16.800 | Put yourself in a tough situation
00:37:18.820 | so that you would be a very, very tough opponent.
00:37:22.320 | By being tough, you can't eliminate the ultimate,
00:37:27.280 | if you do something very wrong
00:37:28.940 | and you have a very motivated person coming against you,
00:37:31.580 | you can't eliminate that.
00:37:33.240 | But by putting yourself in the toughest situation,
00:37:35.760 | you can make most of the problems go away.
00:37:39.160 | Just a very simple example from my own personal life.
00:37:43.060 | One of the benefits that I've always had in my entire life,
00:37:48.060 | and it's of none of my own doing,
00:37:51.480 | is I've always been a physically large person.
00:37:54.200 | And when you are a physically large person,
00:37:56.760 | people don't mess with you.
00:37:58.240 | I never was messed with in school
00:38:01.280 | because I was physically large.
00:38:02.600 | Now, if you are a small person,
00:38:04.600 | you're gonna have to learn how to toughen yourself up
00:38:06.680 | and deal with that.
00:38:07.680 | These are the cars that were dealt.
00:38:09.560 | But I always observed that nobody ever messed with me
00:38:13.320 | because I was physically large.
00:38:15.100 | Now, we know that in terms of schoolyard bullying,
00:38:18.160 | but you can put the same thing in place
00:38:19.980 | for yourself in every stage,
00:38:21.560 | even just in terms of protecting yourself
00:38:23.220 | from physical attack.
00:38:24.520 | If you look like a tough person,
00:38:26.800 | if you just walk like you know where you're going,
00:38:29.960 | all the simple things that we all know to do,
00:38:32.600 | when you're out walking on the street,
00:38:34.000 | walk like you know where you're going.
00:38:35.440 | Don't be paying attention.
00:38:37.000 | If your head is up, your eyes are looking around,
00:38:39.700 | you will dissuade an attacker on the street
00:38:43.100 | because they just look at you and say,
00:38:44.800 | "Ah, there's somebody easier next door."
00:38:46.900 | Now, the same psychology applies
00:38:48.920 | in asset protection planning.
00:38:50.920 | By being a tough person
00:38:52.920 | and having all of these things put in place,
00:38:55.640 | you will avoid most of the problems.
00:38:58.340 | Remember, the vast majority,
00:39:00.920 | I think like 95% of lawsuits
00:39:02.920 | are probably settled out of court.
00:39:04.800 | And so at every stage,
00:39:06.480 | you're dealing with just a psychological game
00:39:09.800 | of negotiation here.
00:39:12.200 | And you're dealing with basically a negotiation
00:39:16.040 | and who's the tougher person with more to lose.
00:39:18.480 | If you're very prudent and very careful,
00:39:23.320 | then you'll eliminate the facts
00:39:24.920 | that could bring somebody against you in the first place.
00:39:27.140 | So if you don't allow in your company a sexualized culture,
00:39:32.140 | you eliminate the sexual harassment.
00:39:36.440 | If you fire the employee who is acting out of turn,
00:39:41.440 | you eliminate the potential claim.
00:39:44.040 | If you don't ever spend time
00:39:46.020 | with somebody of the opposite sex alone,
00:39:48.560 | you eliminate the entire case.
00:39:51.040 | And so if you are prudent in those things,
00:39:53.280 | just going with a totally different area
00:39:55.580 | of civil litigation that happens all the time,
00:39:58.140 | if you are simply tough in that way
00:40:00.180 | and you create the right culture,
00:40:02.220 | you protect yourself.
00:40:03.580 | If you clean the sidewalk,
00:40:05.060 | if you fix the gutter,
00:40:06.220 | if you cover over the old well,
00:40:07.780 | if you look for the potential risks
00:40:09.380 | and you fix those things,
00:40:10.700 | then you avoid the circumstances in the first place.
00:40:14.340 | Now, if circumstances occur
00:40:15.940 | or somebody thinks that circumstances occur
00:40:18.140 | or somebody feels that circumstances occur,
00:40:22.960 | by having all of your assets hidden and protected,
00:40:27.680 | then when that attorney does an asset search,
00:40:30.160 | they say, "Go back to the plaintiff and say,
00:40:31.860 | "I'm sorry, this guy doesn't have any money."
00:40:33.440 | Or if he does have money,
00:40:34.720 | "I don't know where it is."
00:40:36.400 | And they require more money from the plaintiff.
00:40:38.900 | Well, most people don't go around with $30,000
00:40:41.000 | to give an upfront fee to an attorney.
00:40:43.440 | And so you eliminate the lawsuits.
00:40:45.360 | When the lawsuits come,
00:40:46.640 | by putting yourself in a maximally strong position,
00:40:49.160 | you can be very aggressive to settle it quickly
00:40:51.560 | and to settle it on your terms
00:40:52.800 | and to cause the opponent to cave as quickly as possible.
00:40:55.920 | So, and then if ultimately you wind up going to trial,
00:40:59.520 | which is the minority,
00:41:00.800 | if you go to trial,
00:41:01.680 | you have the strongest case
00:41:03.240 | by doing all the things that we've talked about.
00:41:06.000 | And then if you lose your case,
00:41:07.620 | then you wind up by,
00:41:10.360 | if you could put an asset in there
00:41:13.040 | that will ultimately be toxic for the creditor to hold,
00:41:16.720 | then you put in place what you need
00:41:20.240 | to even still be tough after the fact
00:41:22.320 | and to, and by isolating that,
00:41:24.880 | compartmentalizing that problem,
00:41:26.760 | the rest of your financial life should be humming along.
00:41:29.120 | So it's not, you don't face wipe out risk.
00:41:31.280 | That's the whole point along the way.
00:41:33.240 | So I hope this is useful to you as a thought.
00:41:36.140 | We'll get into more specifics coming forward in the future,
00:41:40.880 | but I hope this helps you to have a good understanding
00:41:43.640 | of the overall process of litigation.
00:41:45.480 | I wanna encourage you and strengthen you to be tough
00:41:48.400 | and to get you to act now
00:41:49.920 | and to be tough so that you can be protected.
00:41:52.240 | Remember, if you're wrong in something, you owe somebody,
00:41:57.240 | you can always take your money and go and pay it.
00:42:00.200 | That should, I'm repeating it 'cause it needs to be said.
00:42:03.680 | If you want to give somebody money,
00:42:05.600 | that's your prerogative.
00:42:07.120 | But in all these kinds of things,
00:42:08.400 | you owe it to yourself and to your family,
00:42:10.800 | to your business to be in a tough situation
00:42:14.080 | by putting in place good planning.
00:42:15.800 | That's it for today's show.
00:42:19.000 | But in closing, I want to expand that theme
00:42:21.080 | for just a moment as I continue to market to you
00:42:24.080 | my most recent course,
00:42:25.160 | which is the "Radical Personal Finance Guide"
00:42:27.680 | on how to save money and borrow money safely
00:42:30.960 | using credit cards.
00:42:32.680 | One of the reasons I created this course
00:42:34.320 | was because this was the type of planning
00:42:37.200 | that I didn't see people talking about
00:42:39.100 | as to how to be tough in your borrowing.
00:42:42.720 | And it's simply, so it's simply using things
00:42:45.660 | like credit cards often instead of other forms of credit
00:42:48.560 | because they're unsecured loans.
00:42:51.200 | And yet unsecured loans can be a wonderful benefit,
00:42:54.520 | but they can also be a very,
00:42:56.440 | they can be poorly managed.
00:43:01.120 | And I've tried to give example again and again and again
00:43:03.600 | of how foolish it would be for you
00:43:04.760 | to take out a secured loan
00:43:06.180 | if you have the option for an unsecured loan.
00:43:08.000 | Because with an unsecured loan,
00:43:09.640 | if you use that unsecured loan to buy property,
00:43:12.280 | you can always go and sell the property and pay the loan back
00:43:15.200 | but somebody can't force you to do that.
00:43:17.520 | And in my observation of counseling people
00:43:19.800 | who are deep in credit card debt,
00:43:21.280 | and especially those who often wind up
00:43:23.520 | in very difficult circumstances,
00:43:25.720 | they never intended to be there in the first place.
00:43:29.080 | They didn't think that they would get laid off.
00:43:31.680 | They didn't think that when they were laid off,
00:43:35.800 | that their kid would get sick.
00:43:37.480 | They didn't think that when their kid got sick,
00:43:39.360 | that their spouse would get cancer
00:43:41.560 | and they wouldn't be able to get reemployed.
00:43:44.260 | But yet one thing leads to another.
00:43:46.360 | And so I always want you to think of maximum toughness,
00:43:50.720 | worst case scenario, what's the worst case scenario,
00:43:53.280 | and then position yourself for that.
00:43:55.120 | And then usually if you do that, you never get there.
00:43:58.280 | You never wind up having the problems.
00:44:00.880 | My observation has been a little bit of care, prudence,
00:44:04.640 | investigation, thoughtfulness,
00:44:06.820 | and good forward-thinking action put in place
00:44:09.800 | in the beginning can save all kinds
00:44:11.460 | of potential problems down the road.
00:44:13.740 | That's the basis of financial planning.
00:44:17.580 | That's the basis of asset protection planning.
00:44:19.860 | Frankly, that's the basis of most life planning.
00:44:23.100 | Most of the problems that we face are of our own doing
00:44:27.380 | because we weren't prudent in the beginning.
00:44:30.440 | Now, some things can be gotten out of some things
00:44:32.000 | you just deal with, that's life.
00:44:33.620 | But I wanna encourage you,
00:44:35.180 | even in your simple day-to-day financial transactions,
00:44:38.040 | with your credit cards, put things in place.
00:44:40.860 | Put the strategies that I teach you in the course in place
00:44:43.240 | so that you never miss a payment, ever.
00:44:45.620 | So you're never a day late on a payment.
00:44:47.220 | So you keep your credit score very, very high
00:44:49.240 | 'cause you never know when you need it.
00:44:50.600 | Go to radicalpersonalfinance.com/creditcardcourse.
00:44:53.260 | Check that out and sign up, give the course a try.
00:44:56.200 | Unconditional money back, 30-day money back guarantee.
00:44:59.040 | Try the course, take the whole thing.
00:45:00.320 | I think it's five, six hours of audio.
00:45:02.760 | You take the whole thing, you can do it in a weekend
00:45:06.980 | or over the course of a few nights.
00:45:08.220 | If you're not satisfied, always happy to return your money,
00:45:10.880 | but I think you'll be satisfied.
00:45:12.000 | So far, every member of the course has been satisfied.
00:45:14.720 | So go to radicalpersonalfinance.com/creditcardcourse
00:45:17.960 | and sign up today.
00:45:19.040 | Thank you.