Divorce issues - Paying back a Family loan after a divorce

Who is Responsible for the debt of a Loan to a Relative After the Divorce in Florida?

It is common place that in this economic downturn for a St. Petersburg Florida Divorce Lawyer to deal with loans from relatives during a divorce. The problem is clear: If Husband’s father made the loan to Husband and Wife, who will be responsible for paying that loan?

Loan? Then Prove it!

The first question that the trial court will ask is whether the alleged loan is really a loan at all, or if it is a gift from the relative to the relative’s family member. If the loan is truly a loan from a relative, then the husband or wife requesting the court treat the loan as a marital debt needs to prove so in court. This means that there must be additional, competent evidence, this is in addition to the financial affidavits, to prove that the debt is a loan from a relative.

The best way? Prepare to have written evidence of the loan. Hopefully, the loan with the relative was drafted and signed by the parties in a written agreement. Alternatively, creating a payoff schedule and showing through bank records that the husband and wife have indeed been paying the loan as indicated would help. Potentially, an affidavit or testimony from the relative reflecting the nature and the amount of the loan may needed.

Relatives Going to Court on the Loan Too? Need to Consolidate the Actions

What if, while your divorce is going on, the relative who provided the loan decides to sue you regarding the loan in a separate court case. Consider the case of Sara the wife and John the husband. Sara and John bought a house while married with the help of Sara’s parents. John executed a written agreement with John’s parents that, if and when they sold the house, the Parents would be paid back first out of the proceeds of the sale before anyone else. Then, the remaining proceeds would be split between John and his parents. Clearly, the House agreement intended for the House to be a gift to John, and not Sara.

Sara then hired a Largo, Florida Family Law Attorney and filed for Divorce from John, and listed the House as a marital asset. In other words, she wanted half of the value of the home. Clearly, the divorce attorneys for Sara and John were going to disagree on whether the house was a marital asset or John’s asset. At the same time, John’s parents filed a civil claim regarding the contract. Sara counter claimed that the contract was signed under duress, and therefore invalid. More importantly, Sara moved to consolidate the two cases together into just the divorce action.

The Trial Judge disagreed, but on appeal, the appellate court reversed. In a situation like this with Sara and John, the proper way to handle it in Court is to bring all the questions into Family Law Court and have the Divorce Judge decided.  <a href="http://www.tampa-divorce-attorney.com">Tampa Divorce Lawyers</a>