Legal Question in Credit and Debt Law in Minnesota
Wife's Responsiblity for Husband's Business Debt/Bankruptcy
Daughter married 15 months ago young man with his own small business, which unknown to her he has been running into the ground financially. He incorporated as the sole owner prior to their marriage, she is considered his partner but not on any of the corporate papers, she only has
a signature for business checks for AP. She found out this week he estimates himself to be in debt to creditors between $25 - 40,000 - he's lost track. He is making NO attempts at paying off and prior to her finding this out she was making minimum payments to his credit cards when they were calling on late/unpaid balances. She is employed full time and carrying most of their personal financial load at this point. She wants to sell the house and his vehicle which is in both their names with no lien on the truck, and use any proceeds to pay down his corporate debt. He refuses and says its now HER problem. She cannot call out from work during the day and when home he's there.
1 Answer from Attorneys
Re: Wife's Responsiblity for Husband's Business Debt/Bankruptcy
THE FOLLOWING IS GENERAL INFORMATION AND IS NOT LEGAL ADVICE. IF YOU SEEK LEGAL ADVICE YOU SHOULD RETAIN AN ATTORNEY IN WRITING.
Many facts need to be clarified before an complete response can be given.
First it is important to know the nature of the business organization. A partnership, a sole proprieter and a corporation are very different things. Your daughters responsibility for debt hinges on exactly what kind of business structure she is mixed up in.
Secondly it must be determined to what extent she voluntarily entered into this business relationship. If she was defrauded or coerced into the business she may have some action against the person who may have pulled the wool over her eyes.
Finally options must be considered. This analysis is sketchy since not much is known about the actual facts here. Your daughter could sue this person for damages. She could negotiate with creditors and settle the debts. She could file bankruptcy. There may be other options.
If you have further questions feel free to e-mail me directly or to call me.
Thank you and good luck.
Ronald J. Lundquist
651-210-3105
www.rjlundquistlaw.com
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