Asset Protection In Relation To Medicaid And Bankruptcy

Asset Protection And Medicaid

Advocating the proper asset protection measure is of crucial importance. The asset protection from Medicaid is to be especially mentioned in this regard. The Medicaid is the health insurance system run by the state for people with low income and limited assets. Planning ahead can offer asset protection from Medicaid to a great extent.

The asset protection from Medicaid planning option will depend on whether the basic documents were in place before the person (asset owner) in question became incompetent. It is better if there were properly drafted powers of attorney and/or trusts set up beforehand in this regard.

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An important point to remember in regards to asset protection with Medicaid is that certain assets are considered to be exempt. Ownership of a licensed motor vehicle is one such exempt item. The home is also usually considered to be an exempt asset. So, normally a home asset protection from Medicare shield is available as per legal provisions.

Asset Protection And Bankruptcy

Just as there is asset protection from Medicaid, similarly there is also the consideration of bankruptcy and asset protection issue. It is a fact that bankruptcy can actually protect your asset in many ways. In a Chapter 7 liquidation case it is the norm for creditors to take all non-exempt assets for the creditors' benefit, yet, at times the non-exempt assets can actually be converted into exempt ones before filing. There may be variation in the rules between states in this regard and also between judges of the same state. So, as regards bankruptcy and asset protection it is better to consult a local attorney to clear all doubts and get to learn all possibilities and safeguards to be taken in advance.

A judgment creditor may obtain a lien on a property. Yet, if that lien impairs any exemption to which the debtor is entitled under the Bankruptcy Code then the lien can be simply avoided. Thus, the lien holder cannot seize the property in question and satisfy the debts.

It should be noted regarding bankruptcy and asset protection that some states have homestead laws offering protection from subsequent creditors. So, a bankruptcy filing in such a state even on the day just before the bankruptcy will allow usage of the state homestead exemption for obtaining state homestead exemption against all creditors.

Again, in case of Chapter 13 bankruptcy, bankruptcy and asset protection plans advocated can allow paying off of arrears on mortgage or car loan or some other loan taken. This will thus help to avoid foreclosure or repossession.

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