[USER]

Looking for advice for a friend. Her spouse made some terrible financial decisions regarding a small business that is now shut down.

The spouse owes almost 50k to her and another 30k to a mutual friend (Bob).

Now Bob has threatened to sue and my friend was unaware of the debt owed to Bob.

She has offered to make payments to Bob to resolve the situation but Bob wants it in full. I don’t blame Bob but how can she save herself in this situation?

Divorce is on the table due to these terrible financial decisions made by the spouse.

She makes a great income (significantly more than the spouse) so how can she protect herself? We are in Texas.

The spouse has a bad credit score and will not be approved for a loan. Are their lenders that take these risks?

I think he should pay everyone back and she should walk away completely but where does he get this cash?

ETA- how can she find out of his business has additional debts? Is this public record?

[Kerri]

She needs to talk to a lawyer. Some of her liability may lie in how the business was set up.

[Elizabeth]

Your friend should not pay Bob at this time, the lawyer should be consulted first.

Your friend should freeze their credit so the spouse doesn’t wreck things more.

[Rosa]

Texas has very particular divorce laws. She needs an attorney. Divorce and business attorney… two different attorneys

[Jay]

He made a mistake for sure but divorce will cost the wife way more than $80k. Is that really a road she wants to go down?

I believe it’s for better or worse, for richer or poorer, in sickness and in health.

[Christopher]

if she makes more divorce is going to cost more that $30k or even the full $80k

[Adam]

I bet there are additional surprises she doesn’t know about as well lawyer and divorce asap.

[Chris]

Bob can get in line. Finalize the divorce. Do discovery to force Mr.Wonderful to release all the financials.

Split the debt/resources as required by your state law.

Then if you feel like making Bob whole do what you feel is right.

MrWonderful accrewed the debt.

[Katherine]

A wife, who invested $50k in husband’s start up Business but she does not know the legal structure of the business or the Financials of the failing/failed Business?

She must insist husband disclose ALL legal and financial and tax paperwork re that Business to her asap in order that she has full disclosure.

Plus she must speak with the Business accountant asap BEFORE she makes any decisions.

[Mike]

First stay out of it. Second if she was not part of the business, and it was a LLC, or Corp, she is not on the debt.

The lender can sue the debtor, but the wife is not part of the debt.

There is homestead in Texas, so that asset is protected.

This goes to never lend money to a friend, and spouses should be careful also.

[Karen]

Maybe the husband can get a hard money business loan and then pay it back by selling off assets, vehicles etc.

[Author]

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