Working While Homeless: A Tough Job For Thousands Of Californians : NPRAverage Rent in Los Angeles, CA - 2025 Rent PricesHard truths about deinstitutionalization, then and now - CalMatters I see this literally all the time, tenant applicants being just a few missed paychecks away from bankruptcy. 

Specially troubling is the lack of clarity on bankruptcy protection for all their funds

I think PG&E actually filed bankruptcy from that.

Bankruptcy due to poor money management is indicative of a behavioral issue that does not change over time.

Telling Tyler that you will see $200K equity in 10 years is irresponsible and you might be sending the poor kid into bankruptcy. 

Long story short, I had to file for Chapter 7 bankruptcy, and it took me seven years to rebuild my life and raise my credit score back to 750.

But if you or even someone you hire were to violate collections laws, licensing laws, securities laws, or bankruptcy laws, you could be fined (or sued) for much more than the investment principle.

This is what I think I know:- The borrower can choose to pay off the note at any time (by selling the property or just paying off the loan with other funds), so it is important that the legal balance covers my investment and some profit- The borrower could file bankruptcy (can someone confirm that this will only cause delay, but not jeopardize ultimately collecting the legal balance of the note)- Most of these DOTs will have a rent assignment clause, so I could try to enforce that and collect rents from tenants (essentially manage the property) while I am holding the note and trying to foreclose.

Holding EXEMPT (from bankruptcy forfeiture) assets, holding assets in exempt entities (retirement accounts, pensions, IRAs, in some states insurance and annuities), homestead exemption, remote entity protection (LLC, Serial LLC, Corporations, Limited Partnerships,) Asset Protection Trusts, using separation of assets for married individuals (in certain states) charitable remainder trust, etc. can be very effective though can be costly. 

I suspect most of these funds will be unwound not with bankruptcy but with severe haircuts for the LPs and break even or slight profit for the top dogs, and let's go heavy into RE courses and teach you how to get out of your paralysis type plays.