Hi everyone,
I just read something on the money manager website that got me thinking (http://www.moneymanager.com.au/planning/guides/articles/living09.html)
In short...if my wife and I are co-borrowers on loans for our IPs (which are owned in my name), and my wife is successfully sued one day (she's going to be a doctor...pretty litigious now) even though the IPs are in my name only, could they still be fair game to my wife's creditors???
In long....
I read on the above mentioned website that if one co-borrower (my wife) is declared bankrupt, then the other co-borrower (me) is liable to pay the jointly owned debt. In the event that payments on the loans are not met, then the lender can choose to sue whichever co-borrower they want.
So, if I understand this right, say my wife and I are co-borrowers on all of our IP loans, but all of the IPs are owned in my name only. Then say my wife is successfully sued, declares bankruptcy, (loses her business, can't work anymore because of the suit etc. etc.) and I myself can't cover the rest of the loan repayments, then the lenders could sue me. And then they'd have access to the assets in my name.
MAIN QUESTION:
However, what if we could still meet all loan repayments on my salary alone. So our lenders have nothing to complain about. Is there anyway my wife's creditors can still get to the assets (owned in my name) just because she was co-borrower on the loans???
My previous accountant told me that putting assets in my name only was an effective asset protection strategy (since wife works in litigious field and I work for a company and intend to always do so). He also told me that my wife going co-borrower with me on a loan was also fine because the loan was a liability to her, not an asset, so any creditors would just need to get in line to fight for any money they could milk from her, but since all assets are in my name they'd still be protected. Is this correct?
Is an accountant or solicitor the correct person to speak to about this, or both?
Thanks in advance for any replies. I apologise for the length of this post but it was difficult to explain it in a short post.
Cheers
John
I just read something on the money manager website that got me thinking (http://www.moneymanager.com.au/planning/guides/articles/living09.html)
In short...if my wife and I are co-borrowers on loans for our IPs (which are owned in my name), and my wife is successfully sued one day (she's going to be a doctor...pretty litigious now) even though the IPs are in my name only, could they still be fair game to my wife's creditors???
In long....
I read on the above mentioned website that if one co-borrower (my wife) is declared bankrupt, then the other co-borrower (me) is liable to pay the jointly owned debt. In the event that payments on the loans are not met, then the lender can choose to sue whichever co-borrower they want.
So, if I understand this right, say my wife and I are co-borrowers on all of our IP loans, but all of the IPs are owned in my name only. Then say my wife is successfully sued, declares bankruptcy, (loses her business, can't work anymore because of the suit etc. etc.) and I myself can't cover the rest of the loan repayments, then the lenders could sue me. And then they'd have access to the assets in my name.
MAIN QUESTION:
However, what if we could still meet all loan repayments on my salary alone. So our lenders have nothing to complain about. Is there anyway my wife's creditors can still get to the assets (owned in my name) just because she was co-borrower on the loans???
My previous accountant told me that putting assets in my name only was an effective asset protection strategy (since wife works in litigious field and I work for a company and intend to always do so). He also told me that my wife going co-borrower with me on a loan was also fine because the loan was a liability to her, not an asset, so any creditors would just need to get in line to fight for any money they could milk from her, but since all assets are in my name they'd still be protected. Is this correct?
Is an accountant or solicitor the correct person to speak to about this, or both?
Thanks in advance for any replies. I apologise for the length of this post but it was difficult to explain it in a short post.
Cheers
John
