I'm having a problem with a bank. My husband is in a nursing home with dementia. The bank keeps insisting that I should be paying off a company credit card debt, where husband is the first signatory. I am on the old age pension and there is no way I'd ever be able to pay it off in my life time. Can the bank force me to sell our house? I have his power of attorney.
QLD Credit Card Debt for Husband with Dementia - Can Bank Force Pensioner to Sell House?
- Thread starter Kengillard
- Start date
Hi Kengillard,
1. If the debt belongs to your husband only, and the house is jointly held by yourself and your husband, they cannot force sell the house as you have part interest in the house. They can only claim the debt against your husband's assets, not against your assets. Therefore, even if you are the POA for your husband, you should be repaying the debt off using your husband's assets, not your own. If the debt is not disputed, and your husband's assets cannot pay this off and you cannot agree on a financial hardship arrangement with the bank, then you may need to declare bankruptcy on behalf of your husband.
2. If the debt is from the company credit card, and if the company is incorporated, your husband should not be personally liable for the debt unless he has signed a guarantee or the like. Ascertain whether the debt belongs to the company, your husband, or whether the company and your husband are jointly and severally liable. Therefore, is your husband actually responsible for this debt?
3. In any case, the bank should be willing to negotiate a payment plan with you, as your husband's POA, given that your husband is in financial hardship. Contact the Financial Ombudsman Services and see if they can help you.
1. If the debt belongs to your husband only, and the house is jointly held by yourself and your husband, they cannot force sell the house as you have part interest in the house. They can only claim the debt against your husband's assets, not against your assets. Therefore, even if you are the POA for your husband, you should be repaying the debt off using your husband's assets, not your own. If the debt is not disputed, and your husband's assets cannot pay this off and you cannot agree on a financial hardship arrangement with the bank, then you may need to declare bankruptcy on behalf of your husband.
2. If the debt is from the company credit card, and if the company is incorporated, your husband should not be personally liable for the debt unless he has signed a guarantee or the like. Ascertain whether the debt belongs to the company, your husband, or whether the company and your husband are jointly and severally liable. Therefore, is your husband actually responsible for this debt?
3. In any case, the bank should be willing to negotiate a payment plan with you, as your husband's POA, given that your husband is in financial hardship. Contact the Financial Ombudsman Services and see if they can help you.
S
Sophea
Guest
Hi Kengillard,
Further to Tracey's comments, a bank can only come after you personally or your assets for payment of a debt if you were a joint holder of the credit card or if you have gone guarantor on his debts or if his debts are secured by joint assets held by you both. It is possible however that a bank would have required your husband as a director to guarantee a credit card debt of a company unless there was evidence that the company held substantial assets.
As Tracey said, I still investigate whether your husband is liable to pay back the debt at all - by determining whose name the account is in? (your husband's name or the company) and if it is in the company's name, whether your husband is listed as a guarantor on the card. A company is considered a separate legal person to your husband and directors are in most cases not liable to pay company debts, (except for example where the debts were incurred when the company was insolvent or if it is a tax debt etc). If the credit card is solely in the company's name and your husband is not listed as a guarantor, then you don't need to worry. The bank will sue the company and probably have it wound up, and they will be entitled to receive payment from any liquidated assets held by the company, but NOT your husband's personal assets.
Read this thread - its not exactly the same circumstances but similar: https://www.lawanswers.com.au/threa...-forced-to-sell-home-if-i-die.2382/#post-8788
I would speak with an accountant or lawyer about it if you are unsure.
Further to Tracey's comments, a bank can only come after you personally or your assets for payment of a debt if you were a joint holder of the credit card or if you have gone guarantor on his debts or if his debts are secured by joint assets held by you both. It is possible however that a bank would have required your husband as a director to guarantee a credit card debt of a company unless there was evidence that the company held substantial assets.
As Tracey said, I still investigate whether your husband is liable to pay back the debt at all - by determining whose name the account is in? (your husband's name or the company) and if it is in the company's name, whether your husband is listed as a guarantor on the card. A company is considered a separate legal person to your husband and directors are in most cases not liable to pay company debts, (except for example where the debts were incurred when the company was insolvent or if it is a tax debt etc). If the credit card is solely in the company's name and your husband is not listed as a guarantor, then you don't need to worry. The bank will sue the company and probably have it wound up, and they will be entitled to receive payment from any liquidated assets held by the company, but NOT your husband's personal assets.
Read this thread - its not exactly the same circumstances but similar: https://www.lawanswers.com.au/threa...-forced-to-sell-home-if-i-die.2382/#post-8788
I would speak with an accountant or lawyer about it if you are unsure.
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