Legal Question in Credit and Debt Law in New Jersey

Spouse's Loan Debt

Hello, my spouse has an unsecured line of credit for his part-time sole-proprietorship business which he has increased now to ($36,000). He can barely make the interest payment each month with his other expenses and continues to borrow more! Eventually I anticipate he's going to hit rock bottom and max out and owe 50,000 to 75,000! Can the bank make me responsible for this line of credit loan? He has no real business assets to speak of. The business is not in my name nor is the business checking account, but we do file taxes jointly with a profit or loss business schedule as part of it. Can they take our house (which we own outright) or other money or assets that are in both our names? Can I absolve myself of his debt somehow now? Please advise, will appreciate any help you can give me.


Asked on 4/20/08, 4:59 pm

1 Answer from Attorneys
John Corbett Corbett Law Firm LLC

Re: Spouse's Loan Debt

You are not responsible for your spouses personal debt but that does not mean that his financial collapse won't affect you. Comingled assets in joint bank accounts can be reached by judgment creditors, for example. The house may be safe from foreclosure, but the bank may still be able to acquire an interest in it. Also, be wary of charges on credit cards that are in joint names. It would be best for you to have all your assets in your individual name and all your credit that way too. Even if you are names as an accommodation party on a credit card in your husband's name, collectors may try to collect from you.

Question for you: Why is your husband's business not in an LLC? If he has enough credit to warrant an unsecured loan of that size, financing should not have been a problem.

See also: http://info.corbettlaw.net/lawguru.htm

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Answered on 4/21/08, 9:53 am


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