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Difference between revisions of "Protecting Property and Debt in Family Law Matters"
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Protecting Property and Debt in Family Law Matters (view source)
Revision as of 15:53, 27 March 2013
, 15:53, 27 March 2013→Debts, Bankruptcies and Third Party Claims
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==Debts, Bankruptcies and Third Party Claims== | ==Debts, Bankruptcies and Third Party Claims== | ||
Apart from the possibility that your spouse will be less than forthright in dealing with the family property and family debt, you may also need to protect your interest in those assets from claims made by creditors | Apart from the possibility that your spouse will be less than forthright in dealing with the family property and family debt, you may also need to protect your interest in those assets from claims made by creditors and third parties, and against the possibility of your spouse's bankruptcy or your spouse racking up further debt. These issues can be dealt with, for the most part, by ensuring that you: | ||
#separate, to convert the ownership of all property to a shared ownership with your spouse as tenants in common; | #separate, to convert the ownership of all property to a shared ownership with your spouse as tenants in common; | ||
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The problem here is that property that is owned only by your spouse, or by both of you as joint tenants, may be vulnerable to your spouse's creditors and in the event of his or her bankruptcy. Say, for example, your spouse has put up his or her car as collateral for a loan. You would normally be entitled to one-half the car's value as a family property, assuming the car was bought during your relationship. If your spouse defaults on the loan, the car can be seized and you could find, especially where there are few other assets, that you can get no compensation for your interest in the car's value once the lender's default fees and legal fees are added on. | The problem here is that property that is owned only by your spouse, or by both of you as joint tenants, may be vulnerable to your spouse's creditors and in the event of his or her bankruptcy. Say, for example, your spouse has put up his or her car as collateral for a loan. You would normally be entitled to one-half the car's value as a family property, assuming the car was bought during your relationship. If your spouse defaults on the loan, the car can be seized and you could find, especially where there are few other assets, that you can get no compensation for your interest in the car's value once the lender's default fees and legal fees are added on. | ||
Your spouse's creditors or trustee in bankruptcy will not usually be able seize assets held only in your name or your interest in property as a tenant in common unless you are responsible for your spouse's debts for some reason, like co-signing or guaranteeing a loan, or using a secondary credit card on your spouse's account. Although, under the ''Family Law Act'' both spouses are responsible for the debts incurred during their relationship, this obligation is only between spouses and doesn't give any extra rights to creditors. | Your spouse's creditors or trustee in bankruptcy will not usually be able to seize assets held only in your name or your interest in property as a tenant in common unless you are responsible for your spouse's debts for some reason, like co-signing or guaranteeing a loan, or using a secondary credit card on your spouse's account. Although, under the ''Family Law Act'' both spouses are responsible for the debts incurred during their relationship, this obligation is only between spouses and doesn't give any extra rights to creditors. | ||
===Creditors=== | ===Creditors=== | ||