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My son signed signed a loan of $70,000 with 5% interest to me for downpayment of his home in California. I paid the mortgage company directly. He was married 2 days before the closing. They getting a divorce and selling the house, their only asset. They made made no effort to repay the loan in 6 years. Would filing a property lien be of any use, since one is a relative? Could I file for repayment from just the wife's half to be taken from her half of the proceeds from the sale of the house? They currently have no income and no other assets large enough to repay the debt any other way. Only my son signed the loan agreement, but Calif. is a common property state.

Submitted: 971 days and 3 hours ago.
Category: Tax
Value: $30
Status: AWAITING CUSTOMER ACTION
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Answer

Unless you secured the note with a mortgage against the property itself, you will not be able to recover from the property. Also, while California is a community property state liabilities are still the responsibility of the individual debtor who agrees to pay the debt. Community property assets however, may be attached (via court action) to pay a liability of one of the spouses.

Accordingly, if you son is the only signatory of the note, only he is responsible for the debt. If you want to enforce the debt you will need to obtain a judgment and then use that judgment to go after his assets (i.e. including his share of the community property assets).

If you want to pursue this I recommend you engage an attorney to handle this for you.

Because it is impossible for me to identify and consider ALL the relevant facts, this advice is not intended or written to be used for the purpose of avoiding penalties, and cannot be used for that purpose.

Expert: Christopher Phelps
Pos. Feedback: 99.7 %
Accepts: 
Answered: 3/27/2007

Certified Public Accountant (CPA)

CPA, CFP, PFS, Tax Practitioner 21 Years, Member AICPA/CSCPA Tax/Financial Planning Committee Member

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