Hi again. Thanks for the additional information.
First, the bank employee is not liable for his father’s debts unless the bank employee personally guaranteed the loan (i.e. co-signed). Second, a consumer does not opt for foreclosure. Foreclosure is the lender’s remedy if the loan is not paid. Therefore, it’s all up to the lender, but the lender will certainly want to foreclose if it’s not getting paid since that’s the only way it can forcefully sell the property to recoup its money. Last, the bank employee can file for bankruptcy if he wants to … there’s nothing in the law that would prevent that.
Therefore, if the bank employee did co-sign the loan, and the lender forecloses and wants to go after the bank employee for a deficiency, then a bankruptcy may be the best course of action. I will point out, however, that some employers don’t like to hire employees who file for bankruptcy because it shows that they may be irresponsible with money … and that could be important to a bank.
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