Assets protection & Cross Securitisation

[Apocalypse]

I remember a story my chiropractor told me a couple of months ago. He was treating a patient a few years ago and all of a sudden the patient screamed out in pain. A few weeks later it turned out that the patient was sueing him for causing him a major back problem which meant he was in pain and couldnt walk properly. (I can't remember what the problem was now) but he had been to other specialists who said that he did have this problem.

Now the funny thing was that the chiropractor was driving down to Gippsland in Vic one day and pulled over at one of the beaches for a break. And who's car did he see there? The patient's. And what was this poor crippled guy doing? He was playing on the beach with his daughter. Anyway, the chiro took a whole roll of film of the guy. When it went to court it was looking bad for the chiro, until his barrister went up to the judge and showed him the photos. The judge called the other barrister over and said "It looks like this guys having us on". The other barrister went over and told his client who walked straight out, no limp, no pain.

So, you see how the chiropractor was going to have everything taken from him and he didnt even do ANYTHING wrong. He didnt even mistreat the patient.

Beachbum, I know that you think that as long as you act honestly then you dont have anything to worry about. I think you have to act honestly and ethically in your dealings with people, and have faith that people will do the same to you. But dont trust them. This kind of thing can happen to anyone. For example, if you hit someone in your car, its fair enough if you pay for their damage and medical expenses, but what happens if the person you hit only had a headache for a couple of days, but then comes back at you asking for a million dollars because you screwed their back up and they cant walk? See above, its easy to do. You only need to protect yourself against the dishonest ones.

Tubs

Seems to me that anyone in that situation would be well served by arranging for a private investigator of some discription to do some surveillance then.

 

[plainsong]

The litigation thing has gone well and truly beyond anything most of us could
think of,
I remember one instance where a pensioner was forced to sell his house,to pay legal costs,
What happened was that a neighbour kindly dropped in and offered to take the old gentlemans dog for a walk. Off they went down the road, but then a dog flew out of the yard a few doors down, and attacked the old mans dog-
The owner of the dog flew out of his house and like an idiot tried to break up the dogfight and of course got bitten-

Next thing the pensioner knew he was sued by the owner of the attacking dog
for dogbite, claiming the pensioners dog had bitten him.

You guessed it--the judge awarded costs and damages to the owner of the attacking dog. The pensioner in his 80's had to sell up his house to pay the damages and costs,

How insane is that!

 

[wbthom]

The litigation thing has gone well and truly beyond anything most of us could
think of,
I remember one instance where a pensioner was forced to sell his house,to pay legal costs,
What happened was that a neighbour kindly dropped in and offered to take the old gentlemans dog for a walk. Off they went down the road, but then a dog flew out of the yard a few doors down, and attacked the old mans dog-
The owner of the dog flew out of his house and like an idiot tried to break up the dogfight and of course got bitten-

Next thing the pensioner knew he was sued by the owner of the attacking dog
for dogbite, claiming the pensioners dog had bitten him.

You guessed it--the judge awarded costs and damages to the owner of the attacking dog. The pensioner in his 80's had to sell up his house to pay the damages and costs,

How insane is that!

Plainsong you are absolutely right - it is insane and it's getting worse. We all think of California US as being the world's worst for litigation but on a per capita basis NSW is the 2nd most litigious and QLD the 5th most litigious place in the world.

Bill

PS Plainsong (or anyone else) could you PM me if you have any more details of this case or similar - I am collecting similar stories. Bill

 

[StuartW]

Disagree

To be honest, this sounds crazy to me. You are almost cutting your nose of to spite your face.

Firstly, taking the attitude that I am going to pre-empt being sued so I will give a dirty big charge over my assets to the “friendly” bank is nonsensical IMHO. How is giving a charge over your assets to you bank described as asset protection? Hasn’t anyone heard of the saying “ a bank will lend you an umbrella when its sunny but want it back again as soon as it starts raining”? The bank is often people largest creditor. By giving them more assets/security doesn’t improve you position.

Secondly, just because you have a registered mortgage for $525k against your home doesn’t mean that an accountant or lawyer is simply going to assume you don’t have any equity. There are millions of people that still have a registered mortgage against their home but do own the bank anything (because the bank claims it just easier to leave $1 in the loan just in case you need money in the future. Yer, right! It’s easier for them to keep tabs on their client just in case they do to another bank and ask for money). Registered mortgage does not necessarily have any relationship with outstanding liability.

Thirdly, if being sued is a real and present risk then get insurance! That’s your best protection. Professional indemnity, public liability, etc. Insure the risk – don’t give away your assets or unduly expose them to the bank.

As you can see, I disagree with this idea in general.

 

[DavidMc]

Surely there is a vested interest for asset protection specialists who are also mortgage brokers in recommending some mortgage shuffling?

 

[paradox]

Bias? Of course But...

I think none of us can be completely free of bias with our opinion depending on our own area of expertise. Yet I believe that most posters on this forum do genuinely try to offer help with the best of their knowledge. Of course, we should always listen to any comment posted with a grain of salt, and build up our understanding from multiple sources rather than relying on one single post.

I think the strength of a discussion forum such as this is that should someone does make bogus claim or severely biased comment, they would be spotted and rebutted almost immediately by the hundreds of other knowledgeable members. An honest and helpful member would gain respect and trust over time.

 

[paradox]

Good to see this thread reactivated! It is great to see Stu bringing in his point of view. The following is just some of my layperson thinking apparently heavily influenced by all the previous posts.

Firstly, taking the attitude that I am going to pre-empt being sued so I will give a dirty big charge over my assets to the “friendly” bank is nonsensical IMHO. How is giving a charge over your assets to you bank described as asset protection? Hasn’t anyone heard of the saying “ a bank will lend you an umbrella when its sunny but want it back again as soon as it starts raining”? The bank is often people largest creditor. By giving them more assets/security doesn’t improve you position.

I think what Bill and the others have proposed here is that they would rather be more exposed to a bank rather than some person trying to have a go at you and sue you for everything that you have got. Yes, the bank would be in a much stronger position but I guess if they are being unreasonable in future dealings you can always re-finance with another lender.

Secondly, just because you have a registered mortgage for $525k against your home doesn’t mean that an accountant or lawyer is simply going to assume you don’t have any equity. There are millions of people that still have a registered mortgage against their home but do own the bank anything (because the bank claims it just easier to leave $1 in the loan just in case you need money in the future. Yer, right! It’s easier for them to keep tabs on their client just in case they do to another bank and ask for money). Registered mortgage does not necessarily have any relationship with outstanding liability.

If all your 2 million dollar property portfolio are mortgaged to the hilt, would it not show that you MAY NOT be a worthwhile target to sue, rather than having an obvious say 1 million exposed equity?

Thirdly, if being sued is a real and present risk then get insurance! That’s your best protection. Professional indemnity, public liability, etc. Insure the risk – don’t give away your assets or unduly expose them to the bank.

Absolutely! I think one would be crazy not to have insurance cover when one is in a vulnerable position. There are, however situations where you may not be covered adequately or the insurance company has denied your claim based on their ground?

Bill, Rolf... or any other knowledgeble guru in the forum care to comment?