My husband is not supportive of a bankruptcy that will affect his personal finances, hence, the question of forming an LLC to protect him. 

He was clueless and thought the Postal Service owned the building.Now that the city of Detroit has filed bankruptcy, I think you will see a chain of bankruptcies at the municipal level.

If you lose your job and tenants move out, in a worst case scenario you can declare bankruptcy and wipe out the house debt, you cannot wipe out the student loans if they were government insured.

Look at bankruptcy to see if there has been any CH7 or CH13. 

Always be watching for 2nd mortgages, mechanics liens, bankruptcies, back taxes, unpaid utilities, cloudy easements, mysterious heirs, etc.

A landlord or any other borrower is not where you should be getting a lending education, they know what they did but they don't know what all a lender does.Another issue with learning from potential borrowers, is that the borrower explains the deal to convince a private lender, they really won't get into explaining their risk exposure, that would be like talking the lender out of making the loan......ever hear a borrower tell an individual how long they may have to wait if the died, took bankruptcy or they can't finish the project because their tools got ripped off......or whatever the reason.Investors that teach folks how to lend money to them are probably most most dangerous out there, their intentions can be very good, their knowledge is not from a lender's side and they won't be hammering all the nails in.Learn from lenders, Jon has loaned money, HMLs and brokers that do a wide variety of lending are probably the best as their experience will be broader.

If you want to avoid some of that, the person needs to do plan their estate.I know very little about German law except what I learned about its old bankruptcy law (which was crazy).

@Dominique McDonald how long ago did you file bankruptcy?

@Mike Mitchell In addition to bankruptcy, you could also ask debtors to settle for a lesser amount. 

This could be formula for bankruptcy if there is a bad recession.