Is this agreement legally binding to my spouse if she isnt mentioned in the agreement?

[larry]

What is the name of your state (only U.S. law)? California

I took out a loan 10 months ago from a personal friend, and have made every payment up until last month, on time and in full.

Last month I was 7 days late and according to my lenders terms in the agreement I am in default and he was able to ask for the total remaining amount. He asked for it and obviously I did not have it, so he stated he had filed a court case. He does not have my address so he had papers served to my wifes work. With her name included on the paperwork. He has stated that he is currently tracking my info down to have me served as well. At my cost.

My wifes name is never mentioned nor signed on the agreement, so I believe that going after her is going to be a lost cause. I am going to continue to make monthly payments until the debt is paid off, however if documents are served to me, I will be going to court. I will include the key information on the agreement and I would like to know if anyone knows if my wife will be held liable for any of this debt. He claims he will take out a garnishment on her wages and any assets I own to pay it off.

However I do not own any assets, as yesterday I took my name off of the vehicle title, which is our only asset. And I have removed myself from the joint bank account. So he will be unable to touch any of those.

Any advice would be very much appreciated. I am a bit flustered at this point because the agreement says that I have until june of 2012 to pay off the debt, yet if I am 5 days late on any monthly payments, I am in default and owe the entire amount.
On a side note: The agreement states that the monthly installments are to be paid upon obtaining gainful employment. Since the move and the loan, my wife and I have decided that instead of putting my 1 year old into daycare I would be a stay at home father. So employment has not been gained on my behalf.

is this even legal?

Below is word for word the important elements of the agreement in question.
My real question is, if I am to pay $400 per month, which I have and the date the agreement is set to have been paid off, june 1st of 2012, do I have until june 2012? or do I really owe this money now and am going to court facing this entire debt in full because I was 7 days late.

I am considering filing bankruptcy before the court date and including him in it just to get this nightmare in my favor, due to me having paid all of my payments on time and he is really only taking me to court because we had a falling out.


[B]Agreement

[B]For the Value Received (My name) Collectively known as the borrower, "Jointly and severally promise" to pay to the order of (lenders name) hereinafter referred to as the lender, Total amount of the debt borrowed"

1. Payment. the principal on the obligation represented hereby shall be fully paid on or before the first day of june, 2012. Monthly installments in the amount of $400 shall be paid upon gainful employment.

5. Default. Upon the occurence or during the continuance of any one or more of the events hereinafter enumerated, the lender or any future assignee may forthwith or at any time thereafter during the continuance of any such event, by notice in writing to the borrower, declare the unpaid balance of the principal on the loan amount to be immediately due and payable, and the principal shall become and shall be immedietly due and payable without presentation, demand, protest, notice of protest, or other notice of dishonor, all of which are expressly waived by the borrower, such events being as follows:
a. Default in the payment of the principal of the loan amount or any portion thereof when the same shall become due and payable, whether at maturity as heroin expressed, by acceleration, or otherwise, unless cured within five (5) days after notice thereof by lender, or any future assignee to borrower.[/B]

[calin]

1. You have defaulted on the loan regardless of the date due for total payoff because you did not make the stipulated monthly payments on time. If this were not legal, then mortgage companies could not foreclose on people who get behind on their house loan payments.

2. If the loan is only in your name, then the borrower will not be able to "successfully" recover any money from your wife. A husband's debts do not automatically extend to his wife. That doesn't mean he will not try because you can sue anyone for anything, but unless he can prove she was the one who actually spent the money or invested it or still has control over it, he's going to be out of luck.

3. This was a friend who apparently though enough of you to lend you a good deal of money at a time when you really had no one else to turn to. I don't know why he is unwilling to give you a few extra days to make your monthly payment, but obviously something has gone very wrong with your friendship. Repaying his original kindness by taking everything out of your name and declaring bankruptcy doesn't seem to me to be the right thing to do, but there's no accounting for what people will do where money is involved.

4. Talk with an attorney about what can happen. The first consultation with an attorney is free and if you're thinking of filing bankruptcy you'll need to visit a bankruptcy attorney anyhow. Be aware that if/when you do actually file, the attorney and court fees will be anywhere from $3,000 to $5,000 so I hope you kept some of that money your ex-friend loaned you. Also, a bankruptcy judge may declare that your taking your name off the bank account and the car title so soon before filing bankruptcy is a clear attempt by you to defraud your creditor(s) and make those items available for payment into the bankruptcy. You would need to speak with an attorney for proper advice as bankruptcy provisions vary from state to state.

[tim]

CA is a community property state. Any debt taken out by one spouse is equally the responsibility of the other even if not mentioned on any documentation.

So yes, your friend can go after your wife.

[raleah]

Yes, if she enjoyed the benefits of the agreement