Bankruptcy and divorce
Hello, I am in the midst of a divorce and have been seperated from my ex for a year and a half.
My situation is the following: He got my father to co-sign on a line of credit of $100K with only a verbal agreement. He had used close to 1/2 of it and proceeded to take out the remaining balance 3 days after I left him.
He’s being sued in California for $85K US for a failed business venture.
We did have a set court date back in May and he missed it as he was out of the country. There have been numerous delays since, which lead to him filing for bankruptcy.
What happens to the debt? He claims that it will be split 50%/50%.
But how can he even reimburse his half of the debt or any % for that matter if he’s bankrupt?
Would my father then be considered a creditor in this case?
Please, please advise.
Firstly, in normal situations the debt is not split. If someone cosigns a loan they have guaranteed that the covenants under the loan obligation will be paid in full. Therefore, if one party defaults, the cosigner essentially steps in to the shoes of the defaulting party and is responsible that everything be paid. As a result, your father isn’t considered a creditor as he never loaned your ex money, he simply is responsible to the bank.
In terms of making payments during a bankruptcy, this is something that your ex may be able to do, but legally can only do this if he is first successfully keeping up with all his obligations imposed by the bankruptcy. Usually speaking this prevents this type of arrangement from happening until after a bankruptcy is completed.