Can my husband be arrested regarding a loan from his employer?

UPDATED: Oct 1, 2022

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Can my husband be arrested regarding a loan from his employer?

My husband was given a loan for a car down payment by his employer who also owns the company. Its a small company. He signed a loan agreement and repayment plan. He used the money on a medical emergency and his employer got angry. He grabbed my husband by the collar and threatened violence but was stopped by a supervisor. He then said he was calling the police claiming that because my husband didnt get a car that he stole the money. Then he made my husband sign a paper under threat of bodily harm, agreeing that he stole it by not using it for a car and had it notarized by his secretary. Now my husband wants

to leave. The stress is unbearable and causing issues in our household. Hes paid up to date on the original agreement but his employer says he owns him now and will not allow him to leave until the loan is paid in full. If he tries to leave his employer is threatening to have him arrested. What can my husband do? He feels helpless because his employer is buddy buddy with our small towns few attorneys and judges.

Asked on June 5, 2019 under Employment Labor Law, Georgia


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

A case can be made that your husband did commit a crime: he obtained the money under false pretenses (fraud) by stating that it was for a car, but then using it for a different purpose. While someone is not supposed to use threat of criminal prosecution to collect on a promissory note or loan so it would be improper to at this point (after not having acted immediately; after having allowed your husband to catch up on payments), if as you say, the employer is "buddy buddy" with the town's few attorneys and judges, the practical thing to to do is pay off the loan then leave, rather than risk legal entanglement. Again, we have to stress that what your husband did was improper: you can't get a loan specifically for purpose A but then use it for purpose B. The fact that employer should not be doing this will not help you if his friend the judge supports him; even if it could then be later overturned on appeal, the cost and impact of the legal action(s) could easily exceed the cost of repaying the loan.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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