Legal Question in Business Law in Arkansas

Re: How do I protect myself as a landlord

You are on the right track. A Limited Liability Company is a good choice for providing creditor protection. An LLC isolates the asset from other assets, and in most cases a creditor's sole remedy is to obtain what is called a "charging order" against the LLC. That means that the asset held in the LLC such as rental property does not have to be sold to satisfy the judgment. It can also mean that if the LLC does not make distributions but has income the creditor can have a tax liability without receiving any funds to pay it. That allows you to negotiate a better settlement. The laws of some states such as Wyoming provide even more favorable creditor protection. You just have to consider the possible risk and compare that to the cost of setting up and maintaining the LLC. Don't forget to maintain insurance and if you form a LLC you need to notify your carrier to be sure the policy is revised for the LLC. Let me know if I can help. 501.687.9000.