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berdldoo

Money borrowed for house purchase and divorce

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My son and his wife purchased a house, they had to borrow money to fix the sewer as a condition of closing.  The money borrowed was from a relative, yet there was no document written up and signed. Unfortunately, my son and his wife are likely going to be getting divorced and his wife says that it's his debt as nothing is contractual. They live in Washington State which is a community property state; my question is, if my son enters into a contract agreeing to re-pay the monies borrowed would it be a shared debt if divorce takes place?

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1 hour ago, berdldoo said:

Unfortunately, my son and his wife are likely going to be getting divorced and his wife says that it's his debt as nothing is contractual.

 

I realize you're simply relaying something she said, but that's a completely nonsensical statement.

 

 

1 hour ago, berdldoo said:

if my son enters into a contract agreeing to re-pay the monies borrowed would it be a shared debt if divorce takes place?

 

I suspect your son already did enter into a contract to repay the borrowed monies.

 

Just because "there was no document written up and signed" doesn't mean there wasn't an agreement to repay the loan.  You noted that "they had to borrow money to fix the sewer as a condition of closing."  I assume the mortgage lender imposed this condition.  Correct?  How was the loan from the relative made?  Was it by check?  If so, to whom was the check made payable?  Your son only?  His wife only?  Both of them?

 

His wife can say whatever she wants, but I strongly suspect that the relative would have a relatively easy time suing and obtaining a judgment against both of them as co-borrowers.

 

Whether it would be advisable for your son to sign something confirming the existing debt is something about which he'd have to consult with a local attorney, but I doubt it would be in his interests to do that.

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First tell your son to stop getting divorce advice from the woman he is divorcing. The debt at this moment is maybe void because of this law, assuming the payback was over one year.

 

 

 

RCW 19.36.010

Contracts, etc., void unless in writing.

In the following cases, specified in this section, any agreement, contract, and promise shall be void, unless such agreement, contract, or promise, or some note or memorandum thereof, be in writing, and signed by the party to be charged therewith, or by some person thereunto by him or her lawfully authorized, that is to say: (1) Every agreement that by its terms is not to be performed in one year from the making thereof; (2) every special promise to answer for the debt, default, or misdoings of another person; (3) every agreement, promise, or undertaking made upon consideration of marriage, except mutual promises to marry; (4) every special promise made by an executor or administrator to answer damages out of his or her own estate; (5) an agreement authorizing or employing an agent or broker to sell or purchase real estate for compensation or a commission.

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49 minutes ago, PayrollHRGuy said:

First tell your son to stop getting divorce advice from the woman he is divorcing. The debt at this moment is maybe void because of this law, assuming the payback was over one year.

 

RCW 19.36.010

Contracts, etc., void unless in writing.

In the following cases, specified in this section, any agreement, contract, and promise shall be void, unless such agreement, contract, or promise, or some note or memorandum thereof, be in writing, and signed by the party to be charged therewith, or by some person thereunto by him or her lawfully authorized, that is to say: (1) Every agreement that by its terms is not to be performed in one year from the making thereof; (2) every special promise to answer for the debt, default, or misdoings of another person; (3) every agreement, promise, or undertaking made upon consideration of marriage, except mutual promises to marry; (4) every special promise made by an executor or administrator to answer damages out of his or her own estate; (5) an agreement authorizing or employing an agent or broker to sell or purchase real estate for compensation or a commission.

There were no specified terms of re-payment established at the time as it was agreed to be paid over a TBD period of time once they had their financial feet under them a bit more solidly.

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55 minutes ago, pg1067 said:

I suspect your son already did enter into a contract to repay the borrowed monies.

 

Just because "there was no document written up and signed" doesn't mean there wasn't an agreement to repay the loan.  You noted that "they had to borrow money to fix the sewer as a condition of closing."  I assume the mortgage lender imposed this condition.  Correct?  How was the loan from the relative made?  Was it by check?  If so, to whom was the check made payable?  Your son only?  His wife only?  Both of them?

 

His wife can say whatever she wants, but I strongly suspect that the relative would have a relatively easy time suing and obtaining a judgment against both of them as co-borrowers.

 

Whether it would be advisable for your son to sign something confirming the existing debt is something about which he'd have to consult with a local attorney, but I doubt it would be in his interests to do that.

The lender imposed the condition and the money, I believe, was deposited into their joint checking account - the lender (relative) at this point is unaware of this situation, trying to understand the potential options before breaking the news to them... 

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1 hour ago, PayrollHRGuy said:

The debt at this moment is maybe void because of this law, assuming the payback was over one year.

 

An obligation to pay money is never invalidated because of the statute of frauds.  The SOF, as applied to contracts not performable within a year only invalidates those agreements that are absolutely impossible to be performed in a year or less.  An obligation to pay money can always, possibly be performed in less than a year.

 

 

5 minutes ago, berdldoo said:

trying to understand the potential options before breaking the news to them... 

 

Then you should please go back and answer the several other questions I asked.

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I assume the mortgage lender imposed this condition.  Correct? 

Yes

 

How was the loan from the relative made?  Was it by check? 

Electronically transferred, I believe

 

If so, to whom was the check made payable?  Your son only?  His wife only?  Both of them?

$ sent to their joint account

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17 hours ago, berdldoo said:

$ sent to their joint account

 

Seems pretty clear to me that the loan was made to both your son and his wife as joint borrowers and that, if the lender chose to sue, he/she would sue and obtain a judgment against both of them.  That the lender apparently chose to make the loan without getting anything in writing was pretty foolish, but that's not your son's problem.

 

I think that answered your question, but please let me know if not or if you have other questions.

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On 7/30/2019 at 12:53 PM, pg1067 said:

 

I realize you're simply relaying something she said, but that's a completely nonsensical statement.

 

 

 

I suspect your son already did enter into a contract to repay the borrowed monies.

 

Just because "there was no document written up and signed" doesn't mean there wasn't an agreement to repay the loan.  You noted that "they had to borrow money to fix the sewer as a condition of closing."  I assume the mortgage lender imposed this condition.  Correct?  How was the loan from the relative made?  Was it by check?  If so, to whom was the check made payable?  Your son only?  His wife only?  Both of them?

 

His wife can say whatever she wants, but I strongly suspect that the relative would have a relatively easy time suing and obtaining a judgment against both of them as co-borrowers.

 

Whether it would be advisable for your son to sign something confirming the existing debt is something about which he'd have to consult with a local attorney, but I doubt it would be in his interests to do that.

 

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