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Thread: hypothetical question on debt

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    hypothetical question on debt

    lets say your wife of many years had a business,totally seperate from your farm. this business has now went bust with debts of lets say 500k. because she is married to the farmer,hense in the eyes of the law own a % of the farm,can the banks follow the farmer/husband's farm for the money. its a general question and by the way my wife hasnt tupence nor debt

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    Re: hypothetical question on debt

    Quote Originally Posted by zsnotdead View Post
    lets say your wife of many years had a business,totally seperate from your farm. this business has now went bust with debts of lets say 500k. because she is married to the farmer,hense in the eyes of the law own a % of the farm,can the banks follow the farmer/husband's farm for the money. its a general question and by the way my wife hasnt tupence nor debt
    Well pay her an allowance, you tight fisted get

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    Re: hypothetical question on debt

    Would need more detail on the structure of things. Is the business Ltd? If so, unless personal guarantees were in place and the director cannot be proved to be negligent (difficult to impossible) then the debt dies with the company. If a sole trader, how did she amass such debts without security? If the security is on the land then it's up for grabs. If in some way she is a sole trader, the business has failed and there is £500k debt she will surely be made bankrupt. Then it gets tricky.

    If the husband owns the farm and they can prove that she had nothing to do with it as she was running her own thing then there might be a chance. It's a very complicated situation and a good IP would be worth talking to. It might also depend who the debt is owed to. A large amount of smaller suppliers are less likely to push than HMRC who will use every power and angle to get the land.

    So the first question is, would this hypothetical business be LTD and are there any personal guarantees or security arrangements?

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    Re: hypothetical question on debt

    Quote Originally Posted by zsnotdead View Post
    lets say your wife of many years had a business,totally seperate from your farm. this business has now went bust with debts of lets say 500k. because she is married to the farmer,hense in the eyes of the law own a % of the farm,can the banks follow the farmer/husband's farm for the money. its a general question and by the way my wife hasnt tupence nor debt

    The answer is never to have a wife of many years, as I haven't....................

    Flippant, I know................................
    Life is a meaningless journey filled with emptiness and pain. Get all the pussy you can.

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    Senior Member b slicker's Avatar
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    Re: hypothetical question on debt

    Quote Originally Posted by Coltheox View Post
    The answer is never to have a wife of many years, as I haven't....................

    Flippant, I know................................
    Flippant, I know

    Is that in the biblical sense?

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    Re: hypothetical question on debt

    If she is personally liable for the debt, I believe the bank could come after any jointly-owned assets, including all marital property.

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    Re: hypothetical question on debt

    I knew a farmer whose wife had shop in the nearby town that went bust. He told me that her creditors came after the farm for money but never got it. If she was in for 500k you would imagine that they would have to have a go .

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    Re: hypothetical question on debt

    It would depend on whether you were in wedlock when the debt was accrued. If the Marriage was post accumulation of the debt there is little chance of creditors having any entitlement to new jointly owned assets, however if you were married while the debt was built up and happened to have a substantial asset you would be lucky to keep it away from the creditors (Even if the credit was obtained on a Limited Liability bases IMO)

    I think it would be a fine detail situation.

    Dave

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    Re: hypothetical question on debt

    She would have to be a business partner in the farm. On your Iacs form. The farm would have to be a business partnership. Her business has got nothing to do with you, married or not

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    Re: hypothetical question on debt

    Quote Originally Posted by crofteress View Post
    She would have to be a business partner in the farm. On your Iacs form. The farm would have to be a business partnership. Her business has got nothing to do with you, married or not
    Technically that depends on Type of business i.e. Limited Company (Limited Liability) or Private Ownership/Partnership etc etc

    Nowadays though if you have a million pound house on the bases of a failed business it is probably at risk no matter what...

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    Re: hypothetical question on debt

    A search on Google obtains the following from Citizens Advice website:-

    Debts


    Living together

    Neither partner is liable for the otherís debts unless one acted as a guarantor for the other or agreed to a joint liability. However, your partner can be liable for debts relating to council tax or a social fund loan.
    Marriage

    Neither spouse is liable for the otherís debts unless one acted as a guarantor for the other or agreed to a joint liability. However, a spouse can be liable for debts relating to council tax or a social fund loan.

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    Re: hypothetical question on debt

    It's not that simple and nothing ever is. If a man owns a farm at the age of 21 and marries a woman, then has children which she raises at the same time as keeping house while the man works his land, she has a claim to his land and business because she has supported him in that. If he had to raise the kids he wouldn't have been able to run the farm as he wished or in the way he has done with her raising his children. This is totally fair and would also apply if the genders were reversed. Hard to seperate the 2 and there are lots of potential arguments, even down to potential inheritances and charges on them.

    Dont believe anyone who says this is cut and dried. Get some really good specialist advice ASAP.

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    Re: hypothetical question on debt

    Actually, if it's an inherited farm, and the farmer does not have an astonishing income from it, then it's really not fair. One guy makes 40k a year from his 9 to 5. Wife spends more time at home with the kids than in employment, then she may even get more than half of the house, pension etc. Fair enough. So he may owe her a (not very large) lump sum and maintenance.

    Guy two makes 30k a year from his family farm. Same thing with the wife. Guy wasn't by any means wealthy, and never would have been when the farm would have been passed on again. Yet he has to turn it into cash to give her half a million on top of what guy one has to pay. Definitely not fair. Especially so if the marriage breaks down because of her affair...

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    Re: hypothetical question on debt

    Quote Originally Posted by brigadoon View Post
    A search on Google obtains the following from Citizens Advice website:-

    Debts


    Living together

    Neither partner is liable for the otherís debts unless one acted as a guarantor for the other or agreed to a joint liability. However, your partner can be liable for debts relating to council tax or a social fund loan.
    Marriage

    Neither spouse is liable for the otherís debts unless one acted as a guarantor for the other or agreed to a joint liability. However, a spouse can be liable for debts relating to council tax or a social fund loan.
    This is advice relating to pre-existing debt!!! Not necessarily debt that is accrued post marriage....

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