My debtor husband paying back my loan

[quincy]

Well, I disagree. I think that the OP should consult a local attorney before assuming/believing that a judge would have a problem with a debtor giving priority to a family member's medical treatment over a creditor.

You can disagree ... but the judgment takes priority.

 

[LdiJ]

You can disagree ... but the judgment takes priority.

So, someone is permitted to spend money on normal living expenses over a creditor but is not permitted to spend money on a family member's necessary medical expenses?

 

[quincy]

So, someone is permitted to spend money on normal living expenses over a creditor but is not permitted to spend money on a family member's necessary medical expenses?

Paying for a parent’s medical expenses when you can afford to do so is great.

delmar’s husband has a $50,000 judgment against him, however, so he could not afford to pay for his father’s treatment.

delmar’s husband won’t go to jail for not having money or assets enough to satisfy the judgment. But, if the creditor discovers delmar’s husband paid $30,000 for his parent’s medical treatment, the creditor is going to want to find the source of this sudden windfall - and why the money was not used to pay off the judgment.

A return to court to answer questions under oath could be in the husband’s future. delmar could be deposed, too.

It does not sound like the judgment-creditor is actively pursuing collection right now, which is probably lucky for delmar’s husband.

 

[delmar]

For what purpose my husband spent that 30K that I loaned him is not in my hands: he requested me and I provided from my personal funds (in Florida, wife and husband can have personal properties although married). I simply loaned him. So, if my husband pays me back that 30K loan, will it come under fraudulent transfer act? 726.106 (2) http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0726/0726.html "A transfer made by a debtor is fraudulent as to a creditor whose claim arose before the transfer was made if the transfer was made to an insider for an antecedent debt, the debtor was insolvent at that time, and the insider had reasonable cause to believe that the debtor was insolvent." Insider includes a relative as well, see the link I provided.

 

[Ohiogal]

For what purpose my husband spent that 30K that I loaned him is not in my hands: he requested me and I provided from my personal funds (in Florida, wife and husband can have personal properties although married). I simply loaned him. So, if my husband pays me back that 30K loan, will it come under fraudulent transfer act? 726.106 (2) http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0726/0726.html "A transfer made by a debtor is fraudulent as to a creditor whose claim arose before the transfer was made if the transfer was made to an insider for an antecedent debt, the debtor was insolvent at that time, and the insider had reasonable cause to believe that the debtor was insolvent." Insider includes a relative as well, see the link I provided.

Again, you haven't answered how much money you deposited into that account since married. What statute are you relying on regarding wife and husband can have personal properties although married? Because FL statute 61.076(6) states this:
 

As used in this section:
(a)1. “Marital assets and liabilities” include:
a. Assets acquired and liabilities incurred during the marriage, individually by either spouse or jointly by them.
b. The enhancement in value and appreciation of nonmarital assets resulting from the efforts of either party during the marriage or from the contribution to or expenditure thereon of marital funds or other forms of marital assets, or both.
c. The paydown of principal of a note and mortgage secured by nonmarital real property and a portion of any passive appreciation in the property, if the note and mortgage secured by the property are paid down from marital funds during the marriage. The portion of passive appreciation in the property characterized as marital and subject to equitable distribution is determined by multiplying a coverture fraction by the passive appreciation in the property during the marriage.
(I) The passive appreciation is determined by subtracting the value of the property on the date of the marriage or the date of acquisition of the property, whichever is later, from the value of the property on the valuation date in the dissolution action, less any active appreciation of the property during the marriage as described in sub-subparagraph b., and less any additional encumbrances secured by the property during the marriage in excess of the first note and mortgage on which principal is paid from marital funds.
(II) The coverture fraction must consist of a numerator, defined as the total payment of principal from marital funds of all notes and mortgages secured by the property during the marriage, and a denominator, defined as the value of the subject real property on the date of the marriage, the date of acquisition of the property, or the date the property was encumbered by the first note and mortgage on which principal was paid from marital funds, whichever is later.
(III) The passive appreciation must be multiplied by the coverture fraction to determine the marital portion of the passive appreciation of the property.
(IV) The total marital portion of the property consists of the marital portion of the passive appreciation, the mortgage principal paid during the marriage from marital funds, and any active appreciation of the property during the marriage as described in sub-subparagraph b., not to exceed the total net equity in the property at the date of valuation.

I think this could be considered a fraudulent transfer when your husband FIRST paid his father's medical bills as he is not responsible financially for his father. Anything more just adds to the fraud. He can't use you to hide marital funds and money.

Personal properties? You must mean non marital. So how was this savings NON MARITAL? Did you have a loan agreement in writing at the time the loan was made and can you prove that this savings was entirely non marital at the time the loan was made?

 

[delmar]

That money I gave is my money I earned from prior to my marriage.

The law you cited is good for divorce and other family matters, not for an external creditor. In Florida, a creditor of my husband cannot touch the money I have in my account which I earned on my own and is not given to me by my husband, irrespective of when I earned that money.

My husband took 30K loan form me and paid for his father's treatment. Now, if my husband pay me that 30K form his earnings then will it be fraudulent as per 726.106 (2) http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0726/0726.html ?

 

[Ohiogal]

That money I gave is my money I earned from prior to my marriage.

The law you cited is good for divorce and other family matters, not for an external creditor. In Florida, a creditor of my husband cannot touch the money I have in my account which I earned on my own and is not given to me by my husband, irrespective of when I earned that money.

My husband took 30K loan form me and paid for his father's treatment. Now, if my husband pay me that 30K form his earnings then will it be fraudulent as per 726.106 (2) http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0726/0726.html ?

It is MARITAL property. Plain and simple. It is not your personal property. But continue on. Yes it is fraudulent. Paying for his father's treatment could also be seen as fraudulent. Fraud all the way around. But carry on.

 

[Taxing Matters]

It is MARITAL property. Plain and simple. It is not your personal property. But continue on. Yes it is fraudulent. Paying for his father's treatment could also be seen as fraudulent. Fraud all the way around. But carry on.

I disagree. First of all, according to the OP, the money lent to her husband was her separate property from before they were married. If she's correct, that's not marital property. There is nothing fraudulent or wrong with her loaning or even just giving her husband her separate property. She also could have done that directly to her father in law, too.

Now, sure, once her husband had the $30K, using that to pay his father's medical bills might raise a fraudulent conveyance problem because now he's making a transfer of what is now his money as effectively a gift to his father. However, if this is a bona fide loan and if they have a written loan agreement which specifies that he must use the money to pay for his father's medical bills that should avoid the fraudulent transfer issue since in that instance he was not free to use the money as he wished.

Even with that, though, the problem I see here is that there well could be a court fight made over whether the loan is indeed bona fide — is there a real intention on the part of the husband to repay it (especially when he's avoiding paying other debts) and whether the OP is truly willing to enforce this loan. Their relationship as a married couple undercuts the argument in favor of a bona fide loan, making it harder to prove this loan is legitimate. For this reason, it would have been better for the loan to be given directly to the father-in-law, perhaps with a guarantee of repayment by the husband. If the husband never touches the money you don't get into a fraudulent conveyance fight.

But I don't see it as such a clear case for a fraudulent conveyance as you do. And it's certainly not ordinary civil or criminal fraud.

 

[BuyLowSellHigh]

Don't withdraw any additional funds out of your separate account. You may need to focus on other protection strategies. Meet with an attorney specializing in asset protection.

When I wanted to protect marital income in Florida I setup a joint tenancy of entirety account with my spouse at a Florida credit union. I then had my earnings deposited directly into this account. I was head of household so the situation may be different than you.

 

[Ohiogal]

I disagree. First of all, according to the OP, the money lent to her husband was her separate property from before they were married. If she's correct, that's not marital property. There is nothing fraudulent or wrong with her loaning or even just giving her husband her separate property. She also could have done that directly to her father in law, too.

Now, sure, once her husband had the $30K, using that to pay his father's medical bills might raise a fraudulent conveyance problem because now he's making a transfer of what is now his money as effectively a gift to his father. However, if this is a bona fide loan and if they have a written loan agreement which specifies that he must use the money to pay for his father's medical bills that should avoid the fraudulent transfer issue since in that instance he was not free to use the money as he wished.

Even with that, though, the problem I see here is that there well could be a court fight made over whether the loan is indeed bona fide — is there a real intention on the part of the husband to repay it (especially when he's avoiding paying other debts) and whether the OP is truly willing to enforce this loan. Their relationship as a married couple undercuts the argument in favor of a bona fide loan, making it harder to prove this loan is legitimate. For this reason, it would have been better for the loan to be given directly to the father-in-law, perhaps with a guarantee of repayment by the husband. If the husband never touches the money you don't get into a fraudulent conveyance fight.

But I don't see it as such a clear case for a fraudulent conveyance as you do. And it's certainly not ordinary civil or criminal fraud.

Actually that is not what she said...
In post 1:

In 2020, my husband urgently needed money and I loaned him $30,000 from my personal account, and I gave that as interest free loan (payable within the next 2 years). I wrote a check from my bank account and he deposited in his personal account and used that, and we have bank documents and agreement for this loan

Post 8:

My husband’s father had some serious health issues and needed money and I loaned my husband that 30K which is from my personal account that is in existence since before our marriage. We have been married for 8 years.

The account has been in existence since before marriage. She never answered how much money she has put into that account during the marriage but they have been married 8 years. She has ignored that question several times. Tells me she is hiding something.
In post 19:

he requested me and I provided from my personal funds (in Florida, wife and husband can have personal properties although married).

So if these are marital funds, I can see it being determined a fraudulent conveyance and a way of hiding funds. But again, she doesn't want to answer the question of how much money she has put into this account in the past 8 years. Nor does she explain why she thinks it is all her separate property (what she calls personal properties though I haven't seen that term used regarding bank accounts in the statutes. I stand by what I say. She has engaged in fraudulent conveyance or enabled her husband to do so.

 

[quincy]

Actually that is not what she said...
In post 1:

Post 8:


The account has been in existence since before marriage. She never answered how much money she has put into that account during the marriage but they have been married 8 years. She has ignored that question several times. Tells me she is hiding something.
In post 19:


So if these are marital funds, I can see it being determined a fraudulent conveyance and a way of hiding funds. But again, she doesn't want to answer the question of how much money she has put into this account in the past 8 years. Nor does she explain why she thinks it is all her separate property (what she calls personal properties though I haven't seen that term used regarding bank accounts in the statutes. I stand by what I say. She has engaged in fraudulent conveyance or enabled her husband to do so.

I think that, should the creditor learn of the $30,000 that the husband had in his possession after the judgment was awarded, the creditor certainly will have questions about the source of this money - and those questions can open up an investigation into delmar’s personal account.

That becomes a problem if delmar and her husband set up delmar’s personal account as a way to hide funds from the judgment-creditor. It is a problem if the husband did not disclose the existence of this account during a deposition that asked about his spouse’s accounts.

I think it could also be a problem if the husband repays the $30,000 loan before paying the $50,000 judgment.

I am curious where the husband will be getting the money to repay the $30,000 loan from his wife within 2 years, as supposedly agreed to in their loan agreement. And I am curious why delmar didn’t just pay the medical expenses herself, or use the money she has to pay off the judgment, perhaps arranging to have her husband pay her back on these loans.

Again, however, it sounds as if the judgment-creditor is not paying close attention to the husband right now, so the $30,000 may go undetected.

 

[LdiJ]

Actually that is not what she said...
In post 1:

Post 8:


The account has been in existence since before marriage. She never answered how much money she has put into that account during the marriage but they have been married 8 years. She has ignored that question several times. Tells me she is hiding something.
In post 19:


So if these are marital funds, I can see it being determined a fraudulent conveyance and a way of hiding funds. But again, she doesn't want to answer the question of how much money she has put into this account in the past 8 years. Nor does she explain why she thinks it is all her separate property (what she calls personal properties though I haven't seen that term used regarding bank accounts in the statutes. I stand by what I say. She has engaged in fraudulent conveyance or enabled her husband to do so.

She did say that it was her savings prior to marriage so I don't think it is fair to state that she hasn't explained why she considers it to be her separate property. It is true that she hasn't answered your question as to whether or not she has added any more money to that account since she got married, but I don't think that it is necessarily true that she is refusing to answer. You didn't explain why the question was relevant in a manner that most laypeople would understand.

 

[LdiJ]

I think that, should the creditor learn of the $30,000 that the husband had in his possession after the judgment was awarded, the creditor certainly will have questions about the source of this money - and those questions can open up an investigation into delmar’s personal account.

If it does open up a questions about delmar's personal account then she should be able to demonstrate that the money was in the account prior to marriage.

That becomes a problem if delmar and her husband set up delmar’s personal account as a way to hide funds from the judgment-creditor. It is a problem if the husband did not disclose the existence of this account during a deposition that asked about his spouse’s accounts.

She has stated multiple times that it was pre-marital savings. I think it unlikely that she is lying about it.

I think it could also be a problem if the husband repays the $30,000 loan before paying the $50,000 judgment.

That would be true in a bankruptcy case, but this is not a bankruptcty case (or at least not yet). People who have judgments against them are not "stayed" from spending their own money unless a judge tells them that they are or freezes their accounts. There does not appear to be any indication that something like that happened here.

I am curious where the husband will be getting the money to repay the $30,000 loan from his wife within 2 years, as supposedly agreed to in their loan agreement. And I am curious why delmar didn’t just pay the medical expenses herself, or use the money she has to pay off the judgment, perhaps arranging to have her husband pay her back on these loans.

I am curious about the first part of that paragraph too, but that is between delmar and her spouse. However, in relation to the second part of your question, if neither of them had direct access to the medical bills to determine which provider should be paid what, that would be a reason why she didn't pay the medical bills herself. Dad might not want to let that much privacy go just yet.

I personally would not pay off a judgment for my spouse unless I had very significant assets in excess of the judgment or the judgment was going to cause me to lose my home or something similar. Otherwise it would not be a logical thing to do. It is better to have the money available to the family in case of emergency.

I am less suspicious of this situation than the rest of you. It is not logical that someone attempting to hide or fraudulently transfer money would go the route of having it go into his account in a big lump sum like that, and then go right back out again. That is like almost deliberately raising a red flag. I cannot speak to the husband's motive for wanting the money and to how he spent it, but I believe that the OP truly lent the money to her husband for what she perceived was a good reason.

 

[Taxing Matters]

So if these are marital funds, I can see it being determined a fraudulent conveyance and a way of hiding funds.

First, in a non community property state, as you know, the concept of marital property is one that comes up in divorce proceedings. Unlike community property, marital property is not a concept of ownership. It instead serves to determine how assets are split upon divorce. So that separate account, in which she's put her money, would not be considered partly his property under state property law. It would be solely her property. Because of that, the husband's creditor could not hit her account to collect on his debts. Since the money was already out of reach of the creditor, her transfer of the money to him would not raise any fraudulent conveyance issues. There is nothing improper about her doing that.

She has engaged in fraudulent conveyance or enabled her husband to do so.

The fraudulent conveyance issue, if there is one, comes after the husband has the money. It's what he does with it that might result in a fraudulent conveyance. I've already discussed that so I won't repeat what I said before. But I'll just add this: if it was her separate account (given state property law(, untouchable by the creditor, and she had paid her father in law's medical bills, there would clearly be no fraudulent conveyance. The creditor never would have had access to the money since it was never in the debtor's hands. So would a court, if convinced that the whole purpose of this arrangement was to help the father-in-law using her funds, hold this to be a fraudulent conveyance and let a creditor get its hands on money it would not have been able to get if she had paid the bills directly? Maybe, if the court were to toss equity aside and simply use a technical application of the fraudulent conveyance statute. But I don't think it a foregone conclusion that would be the result. It would have been better, of course, for her to pay those bills directly and not have the funds pass through her husband's hands, as I said before. Then the issue would never come up. But even if it did end up in court, I cannot say the father-in-law would be compelled to pay over $30K to the creditor.

 

[Zigner]

Let's not lose sight of the original post:

What is the name of your state? Florida
My husband lost a case in 2019 and should pay about $50,000 to the creditor. However, after trying for a year, the creditor stopped pursuing the collection efforts. I am not a party in that case. In 2020, my husband urgently needed money and I loaned him $30,000 from my personal account, and I gave that as interest free loan (payable within the next 2 years). I wrote a check from my bank account and he deposited in his personal account and used that, and we have bank documents and agreement for this loan. Now, if my husband pays me back that $30,000, then will it create any issue to me or to my husband, form the creditor, specifically in terms of fraudulent transfer act of Florida?

Judgment was entered against hubby in 2019.
Wife loaned the money to hubby in 2020.
Now wife wants to know if the act of hubby paying the loan she gave ahead of the judgment will create a problem.

What hubby used the money for is irrelevant, as is where the funds came from. The only thing to think about here is the money that hubby eventually has available to pay back his creditor(s).

If hubby has $30k, that should go to pay the earlier judgment before it goes to paying back the loan from the wife. I believe that the hypothetical future payment certainly could create a hypothetical problem for the hubby wrt a fraudulent transfer.