Of course the public records are still there to find lawsuits but this development could lead to someone renting to a bad risk because these debts are now invisible before a case is filed in court.https://www.cnn.com/2023/09/21/politics/medical-bills-credit...

Your expertise and advice would be highly valuable.The biggest liability I see is an aged lawsuit that arises. 

Any title company attorney does quiet title lawsuits all the time.

Hughes had a weak attorney who accepted a full settlement check, Hughes attorney cashed the $3000 without carrying the lawsuit on.

Minnesota set landmark precedence in how claims were handled when we (various builders) filed class action lawsuit vs ever major insurer in MN, with countless homeowners, and won. 

Zillow refused, so the seller filed a class action lawsuit alleging that Zillow was, among other things, violating the state’s Deceptive Trade Practices Act and Consumer Fraud statute.

Provided you properly maintain your properties law suits are extremely rare. 

@Roman Ustoyev a better strategy may be to set up LLC protection-friendly state like Wyoming or Nevada and then register to do business in Connecticut.To your benefit, there is a line of cases holding that Wyoming / Nevada law must apply even if any lawsuits were to originate from Connecticut.Set up LLC there and then venture into the less friendly states like CT / NY. 

(at least briefly.)Or, the lender can see that their path to foreclosure may become a lawsuit and they will simply postpone the foreclosure sale until the Quiet Title is dropped or resolved then they will file foreclosure proceedings again.

As far as duplex vs. in-law-suite goes, I'd probably focus on in-law-suite/adu properties as those will likely be in better neighborhoods (generally speaking, there are some exceptions).In-law-suites do present unique challenges such as utility bill back (since they are almost never submetered).Hope this helps.