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QLD Debt Help - Jointly and Severally Liable to a Debt?

Discussion in 'Commercial Law Forum' started by not-the1, 21 April 2015.

  1. not-the1

    not-the1 Active Member

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    My question is in a few parts
    1. I have signed a document that makes me 'jointly and severally liable’ to a debt of over $400,000 (1 other person also signed the documents). I wasn’t given an opportunity to seek legal advice as the person who made me sign it was a former lawyer from Victoria and the documents were signed in his lawyer's office in QLD. Does this make the documents disputable or null and void? The documents were signed almost 7 years ago and the person is looking to lodge them with the courts to actively pursue me before the statute of limitations runs out.

    2. Are there any legal precedents of this nature?

    3. Did the documents owner act fraudulently in making me sign these documents in this matter given that fact that he is a lawyer himself? (I have zero education in this field at all).

    4. What other factors should I consider before moving forward to resolve this?

    5. If I were to declare bankruptcy would this and any other current liabilities be able to pursue me in the future?

    NOTES: The Company the funds were used has since been liquidated and has been deregistered by ASIC, I was the director.

    Thanks so much in advance for your answers.
     
  2. hlly

    hlly Well-Known Member

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    1. It depends on a lot of factors, primarily what kind of documents they were and who the other parties involved were. The more likely answer is 'no'. But it depends.
    2. Not sure what this means. Precedents of people trying to void contracts etc? plenty
    3. No
    4. You should get legal advice. It will be well worth the money
    5. Not after you're a discharged bankrupt
     
  3. not-the1

    not-the1 Active Member

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    Hi hlly,

    Thanks so much for the reply. On point 2 I mean any precedents of people who have successfully fought in a similar circumstance to my points and won.

    Thanks.
     
  4. Rod

    Rod Well-Known Member

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    If you are jointly and severally liable that means the other party that signed is equally liable for the debt. Can they pay the debt?

    If you were not under duress when you signed the contract, and you run a business (ie were a director), it is assumed by courts that you know, or at least should know, what you are signing.

    As Hily says - get legal advice if the amount outstanding is still significant.

    Keep in mind that not all debts are extinguished by going bankrupt (eg taxes owed).
     
  5. not-the1

    not-the1 Active Member

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    The other party can not pay and the amount is significant.

    The document owner was also a 1/3 shareholder in the company, and did most of our legal works throughout the companies life.

    IE: I trusted him to be acting in my/the Companies interest because of his role, where it is now clear he was acting in his own interests on this occasion in protecting himself.

    Does that change anything?

    Thanks.
     
  6. Rod

    Rod Well-Known Member

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    Unlikely. Shareholders have little to no say in the day-to-day running of a business. Did he also have a role as director/employee that he abused?

    He is within his rights to seek recovery of money he loaned if the terms of the loan were/are not being met by the business that received the money.
     
  7. not-the1

    not-the1 Active Member

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    Hi Rod,

    He wasn't in the day-to-day management in the office (although he would visit to attend meetings or to check up on things), but he WAS present at ALL strategy, planning, budgeting, stocktake, direction meetings with in put and tasks to complete were given to all attendees including him, so he wasn't just a shareholder but active within the running of the business.

    Thanks.
     
  8. Rod

    Rod Well-Known Member

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    Has the business that received the money met the conditions attached to the loan? (eg paid the loan repayment instalments in full and on time)

    Unless there is gross mismanagement/fraud/(some other illegal activity) by him then I really don't like your chances at court.

    Probably best to now seek legal advice. Someone with legal knowledge should go through the liquidation papers and the loan documents to see if there is an escape clause you can utilise.
     
  9. not-the1

    not-the1 Active Member

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    Thanks Rod,

    Will get my ducks in a row and take it to the next level.

    P.S. Nice site nofines.org - good luck.
     

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