I co-signed on over $4 Million worth of debt for fathers business at age 22. Loans defaulted and business bankrupted, chances of deficeincy judgment?
Question Details: Two years ago when I was 22 I co-signed on two loans with my dads company. The economy went south and the loans defaulted. The company filled for bankruptcy along with my dad. I am most likely going to be left holding the bag for these loans ($4 million plus). Now banks are doing not only foreclosing but going for defiance judgments. My questions are as follows: What is the probability of banks coming after a 24 year old with only $10k in assets? My wife and I own a home and she owns another home we currently rent. Can we be paying extra on that mort. and not be defrauding creditors?
Bankruptcy Law Answers
From this outline of the facts, I'd say you are definitely going to be liable on the deficiency judgments.
As long as your wife didn't sign on the loans, anything she has in her own name won't be in danger; I'd suggest that she set up a separate checking account (if she doesn't have one already) and put her paychecks and any rental income into it, because what's in both of your names can be reached, after what's in your name alone is gone.
Please consult with a local bankruptcy attorney as soon as possible, for reliable advice based on all of the detailed facts of this situation.
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