What remedies are available for a loan given to ex-daughter in law when they get divorced?
Full Question:
Answer:
For purposes of this answer I am going to assume that the loan you gave was unsecured, meaning you did not take a security interest in real estate as collateral for the loan. If you did, upon default of the loan, you could foreclose to get payment of the loan out of the value of the property.
Collection of an unsecured debt or loan will require a lawsuit either in the state where the defendant/borrower lives or the state where the plaintiff/lender lives. Typically a written demand for payment is made first.
If the loan was given with a promissory note, it may contain the details on how a default would occur and what liability the borrower incurs upon default.
The action or decision of the arbitrator in the divorce proceeding most likely was acting in accordance with the laws of Colorado.
Colorado is an equitable distribution state, which means that the court will set aside to each spouse that spouse’s separate property and divide the marital property between the parties as the court deems equitable and just, after considering all relevant factors, such as:
1. The contribution of each spouse to the acquisition of the marital property;
2. The value of the property set aside to each spouse;
3. The economic circumstances of each spouse at the time of the property distribution, and;
4. Any increase or decrease in the value of the separate property of the spouses during the marriage or the depletion of the separate property for marital purposes.
The first dispute in contested divorces generally deals with which marital assets are community property. Usually, all earnings acquired during marriage and everything obtained with those earnings are community property. All debts incurred during marriage, unless the creditor was specifically looking to the separate property of one spouse for payment, are community property debts.
Generally separate property will be: gifts and inheritances given just to that spouse; personal injury awards received by that spouse; proceeds of a pension that vested before marriage; properties purchased with the separate funds of a spouse remain that spouse's separate property; and/or a business owned by one spouse before the marriage remains his or her separate property during the marriage, although a portion of it may be considered community property if the business increased in value during the marriage or both spouses worked at it.
Conflict may arise when separate property is mixed together with community property. Sometimes, one spouse may be able to identify which portion of the property is separate. One example of this is when a house is owned before marriage and continuing mortgage payments are made throughout the marriage. Otherwise if the separate property becomes mixed with the community property, and the two cannot be distinguished, the entire thing becomes community property.
