What are my options if a family member took an SBA loan out in my name without permission, and ithas now been sent for collection?
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What are my options if a family member took an SBA loan out in my name without permission, and ithas now been sent for collection?
Last year the US Dept of Treasury took the tax refund that was due to my husband who has nothing to do with this situation because she defaulted on the loan and hasn’t been able to make payments. She said she asked the loan officer to transfer the loan into her name and to remove me from any responsibility but apparently the loan officer left the company shortly after the loan funded. I just received a notice from them demanding payment from me. What should I or she do at this point?
Asked on December 30, 2010 under Bankruptcy Law, California
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
You have a hard choice to make. If the family member took out a loan in your name without permission, he has committed a form of theft. You should not be liable for her loan, EXCEPT that to escape liability, you may have to report her to the police for having stolen (from you or your identify; there are several ways it could be categorized). You can't have it both ways--you can't escape liability for the loan on the grounds it was unauthorized and also not treat it as fraud or theft. Therefore, if you want to try to escape liability, you will probaby need to treat the family member as the criminal that she in fact is. (I know that sounds harsh, but consider: if a stranger did this, would you have any compunction about treating it as a crime and reporting it to the police? The fact that family did it does not make it ok, unless you are going to "ratify" her action.) Therefore, you need to decide what you're willing to do, and you should consult with an attorney about what steps to take.
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
So you did not co-sign a loan or apply as joint applicants. She stole your Social Security number and took out the loan. She committed identity theft and perpetrated a fraud on the bank. Do I have it all correct? Then what you need to do is to press charges as soon as you can or it is going to look like you allowed it all to happen. You say things like "last year" on the issue with the tax refund and this worries me. If you knew about this all but let it go on until such time as you were adversely effected (i.e., they came after you) then you are not in the best position legally. Seek legal help here. Good luck.
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