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?

Get Legal Help Today

 Secured with SHA-256 Encryption

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 11 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 11 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.


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 AttorneyPages.com 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.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption