Q: Can a promisary note still hold up in court?
I’m in the middle of a nasty divorce, my soon to be ex is now filing bankruptcy. He still owes my parents 30,000 on a promisary note. My dad had in case of divorce, foreclosure and bankruptcy that they were to be paid. What happens now?
A: The clause in the promissory note stating that an unsecured debt is not subject to bankruptcy laws is unenforceable. Unfortunately, if your soon to be ex-husband files for Chapter 7 bankruptcy and he has no non-exempt assets for the court to distribute, the debt that he owes your parents will most likely be discharged in bankruptcy. Often times in cases involving debts to family members, the party filing for bankruptcy does not tell their attorney of the debt and this type of debt generally doe snot show up on credit reports. Your parents may want to consult with an attorney so that their interests are represented in the event that he has non-exempt assets to distribute.
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