If I just found out that my husband of 4 years signed a personal guarantee for his parent’s business 10 years ago, can my/our assets be seized for their debt?
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If I just found out that my husband of 4 years signed a personal guarantee for his parent’s business 10 years ago, can my/our assets be seized for their debt?
They are around retirement age and are contemplating just “giving up” the business with it’s close to $2 million in debt. My husband had basically no assets when he signed but has always been employed by the business. I brought about $400,000 to the marriage. My understanding is that the only other guaranteer were the parents/owners and another brother. None are in very good financial shape and will likely just declare bankruptcy. Is there any way we/I can protect myself from this debt that I wasn’t aware of or party to? My husband was young and didn’t realize what he was signing.
Asked on August 27, 2012 under Business Law, Wisconsin
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
Assets you brought into the marriage should not subject to your husband's personal guaranty, though be aware that creditors may try to reach them--and may even encumber or seize them--thinking they are your husband's or marital assets, forcing you to then take action to protect or recover them.
Your husband's assets are obviously at risk. And marital assets--anything you and he have acquired since being marriage--are also potentially subject to action by creditors.
Speak with an attorney with estate planning experience immediately. There are ways to maximize the protection of you personal assets and your share of marital assets, but you need professional guidance on doing this.
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