His book describes forms of asset protection on your primary residence. Does not protect against debts secured by a mortgage, deed of trust, tax liens, child support, mechanics liens and alimonies. Bankruptcies may have lower exemption rates. However, for business and personal loans, credit card debt, and accidents the homestead act can protect your equity.
Protections:
1. Insurance - the claim/court action my be an exemption under your policy;
2. Mortgage company is first lien holder;
3. Homestead Exemption can protect equity in house,varies state-to-state;
Example:
Home Value $500K - mortgage $200K = $300K equity susceptible to creditors. Assume the home is located in Texas, Florida, Iowa, Kansas and Oklahoma which have an unlimited dollar value for protection (other states have $50K limit, some have none). If the home is located in Texas, all $300K of equity is protected; if located in a state with $50K limit, $250K is exposed. If named in a lawsuit and found negligent, the court could force the sale of the property to attempt to acquire the $250K equity.
