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if wives business goes under can they come after our house?

3 months ago - Posted by

wife inherited some money. she is helping out her son to start a new business. For legal reasons she had to put her name instead of his on company along with his friend. If it ends up going under can they come after our house? Since this was her investment out of her money.

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1 Answer

TAD Member

3 months ago

I am assuming the company is a limited company. If this is the case Directors are not normally liable for the company’s debts, even if it fails.
However, if your wife gives a personal guarantee to any of the company’s creditors, she can be held personally liable. This is even if she invested money in the firm. In actual fact, her right to be repaid her investment comes after the creditors right.

In terms of how the house could be placed at risk, this can either be by going to court, getting a CCJ and executing a charging order over the house or bankrupting her.

However, the default position is directors are not normally liable for the debts of a limited company, other than up to the value of any shares they hold in the company.

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