Ways of protecting assets from creditors

I'm considering starting the 3 letter process but I'm worried about what might happen.

Is there any way of protecting assets - I own my own home plus own another property in which my daughter and grandaughter live - the combined equity in both properties is less than the total amount I allegedly owe (which is around 50K spread over a few different credit cards).

Even if I was able to sell both properties and use the proceeds to pay off part of the alleged credit card debt of 50K, I'd still be left with around 20K of alleged credit card debt and I think I would struggle to find anywhere to rent, given that I am on a very low income and of course my credit score is very poor, plus I think my daughter would also struggle to find anywhere to rent for the same reasons.

Any advice would be greatly appreciated, thank you.

I have heard of the protection offered by trusts, but it may be too late for you unfortunately...

'One of the reasons for setting up a trust is to set aside property as separate from one’s personal assets. One of the benefits of this is that assets which are held in a trust are protected from creditors, for example should the settlor become insolvent or be declared bankrupt. However, there are limits on such protection as explained below.

A recent BBC Panorama programme highlighted that bankruptcy isn't always what it seems. Some of Britain's biggest bankrupts are going to great lengths to hide their money while declaring themselves bankrupt to escape their debts. Doubtless, some of the ways of hiding money involves trusts. Sometimes a “proper” trust may be created but with the specific intention of avoiding creditors; in other cases there may only be an appearance of a trust. In other words, there may be a sham. In either case the Courts are likely to set such a trust aside. All financial advisers need to be aware of when this can happen.

Trusts and protection from creditors
It is well known that, for a trust to be legally effective, the settlor must divest himself of the beneficial ownership of the trust property. This is especially important where the settlor is one of the trust beneficiaries or has reserved extensive powers for himself. If the trustees do not assume proper control over the trust property and simply follow the settlor’s instructions, the chances are the trust will be declared to be a sham or a mere illusion (there is only a subtle difference in law between the two). There have been a number of cases where a trust has been declared to be a sham and therefore not valid.

As for trying to avoid creditors, even if a trust is not a sham, there is no absolute protection. Namely, there will be no protection for trust assets if at the time of making the transfer to the trust the settlor is already insolvent (or becomes insolvent as a consequence of the transfer) or the transfer is made with a view to avoiding creditors. The statutory basis for this in England and Wales is in sections 339-423 of the Insolvency Act 1986.

Generally, transfers made more than 5 years before insolvency will be "safe" but there is no time limit if the intention was to defraud creditors.'

From what I've read it seems that companies are good way to do it.

Private foundations are another.

There are two things under the 1986 Insolvency Act 1986 to be aware of:
1) Transactions at an undervalue : Ie moving money/assest about for little or no consideration. The Official Receiver can go back at least 3 years to reverse any transaction like this.
2) Fraudulent preference : If you pay a creditor (like a family loan) in preference to another (like a bank) then that could also be reversed going back three years , and can face charges.

If you do any of the above, hold out 3 years before bankruptcy.

"Beware that, when fighting monsters, you yourself do not become a monster."