Since it was brought up earlier I figured it was worth mentioning what is always or sometimes exempt from bankruptcy:-State and federal income taxes within the last three years-Student loans (mentioned above)-Vehicle accident claims due to drunk or reckless driving-§523 Bankruptcy Code, money obtained by fraud:§523 Bankruptcy Code-Eve of bankruptcy luxury purchases-Willful and malicious injury to another or his property-Government fineNone of that will really help you at all, but I figured it would be good to know anyway ;-)When you make loans you assume default risk.

I have gotten in this situation with Juniors on the west coast, but mine were weirder  bank said the junior was reconveyed by accident and is still valid.. the bank brought suit and we settled but what was a great deal became a break even deal so at least we did not get hosed.Auctions from what I can see out your way are far more complicated than our auctions on the west coast.

You might need it to cut your seatbelt out if you're in a car accident.

@Blake La Grange  I think your fine I have followed the Morris thread those folks I can't believe are still buying that stuff given the horrific customer service they are talking about on the threads and investing in the D class  markets that we all know simply never perform over time..

So even if you pick a state with stronger protections like WY or NV, the cause of action arose in the state where the tenant fell, so likely that the court where the accident happened would have jurisdiction.California tends to have more laws on the books and requirements and restrictions that it can be a good idea to form a CA LLC for out of state property so that you as a CA resident are covered, and to try to have your contracts fall under the purview of CA courts.

Hmmm, we'll do what you like, but I'd bet that that policy bites you one day...not having control over your own properties is an accident waiting to happen, IMHO. 

What if they get behind on some finances like taxes or don't pay a contractor or get in an accident and a judgement gets applied against 'your' property?  

Perhaps under your lease agreement you were not obligated to terminate the lease due to second-hand smoke, but I completely agree that's an unhealthy and horrific situation for a family with children.

So a tenant or someone suing him (car accident victim, etc) could easily look this up.

@Michael Doherty you should always put every rental property in a separate LLC so the one does not affect the whole and protects you against personal liability.If you have a property in your personal name It’s not just about Financial liability but legal and criminal liability as well in the case of an accident.