One of the collections agency is suing her for a portion of the debt and just opened the case on Nov 1.When I clicked on the "case history", it read1/24/2013 Suggestion of Bankruptcy, filed.Not knowing what this is, I looked that up and it said, "Suggestion of bankruptcy is a document filed with a court to put it on notice that the defendant in a pending lawsuit has filed a bankruptcy case."

With your advice I am more likely to be perceived as defending against this practice, and I will avoid gaining a reputation as a "fish", to borrow from a poker analogy.Many thanks.

So, you take that to court and defend your sham transaction, false testimony, contempt of court, fraud, if in bankruptcy of either trading partner you have filing false statements, bkrcy fraud, if you used the mail, mailing back the deed of trust from the recorder's office you have mail fraud, if the amounts are over ten thousand you can look to money laundering issues, even if cash did not change hands, as with future advance notes you have no encumbrance without claiming a balace owing.I suggest you stick to conventional methods of asset protection

Gain the business of those you can and defend forcefully against those who may work against you in an ethical and legal manner, educating them.

If the equity, which is undefined at the time of creating the note, creates a number that makes your loan 20% interest at deal's end, how do you defend that?

A good prosecuting attorney will identify an attempted scapegoat, it’s just a matter of how well the defendant created a legal mess and what it will cost them to get out of it.

Your LLC may have buy-sell provisions, estate planning elements that avoid default provisions, keyman provisions and deductable life insurance to fund the loss of a key person, it can allow admittance and withdrawl of any member under special circumstances.......just provides more flexibility in every aspect of doing business.Another issue, professional liability, try nailing some internet attorney form shop for errors or ommissions, failing to provide prudent counsel....you'll likely see a disclaimer, "we ain't responsible for nothin", at least your attorney is held to higher standards and will defend his work!

So now after defending my position, I will reask a two of the questions I asked in my original post. 1.)

Steve, that sounds like you're keeping the pet deposit.The courts vary, infact, judges vary on what is normal wear and tear.To find out where you might stand you might ask someone at your local legal aid office as they sometimes defend tenants with significant landlord disputes.

The reason you don’t want to mess with them is because if they pick on you, it will cost a lot of money to defend yourself.