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Samer (Manager)     05 July 2013

Inheritance of debt

We are 2 brothers and 5 sisters. When my father died he had $375,000 worth of business debt and $200,000 personal debt. His business value when me and my brother took over was less than $50,000. We were forced to sign an agreement by my brother in law which transferred power of attorney to me but we were responsible for everything we did. We worked very hard for a year and did not take any salary and made it profitable. None of my sisters or their husbands gave a hand or paid for the debts.

Years later my sisters and their husbands came to ask for their share in profits from business. Do we owe them anything when our liabilities were more than assets when we took over the business?


 3 Replies

Hemang (Advocate)     05 July 2013

Issue a notice explaining the facts and circumstances of the case. You should very clearly state in the notice that how much debt was paid by you and what is the record maintained. Please do not state any fact for which the account is not maintained. If you have really paid the debt, then you must have maintained the record. Supply them with the record. Supply your income tax record, where also you must have divulge the facts about the debt incurred. Your accountant must be a specialized person, who better knows the seriousness of keeping the account and how it is maintained. All this will prove that the debt was higher than the value of the property. You can ask them to contribute portion of the debt and recognize their right, or else ask them to forget. 

2BHelpfull (Other)     06 July 2013

""""We were forced to sign an agreement by my brother in law """

content of the agreement is very important .

it will depend on the content of the agreement whether u can claim the earlier loss or not./ whether u have to share profit in future or not.

Hemang (Advocate)     06 July 2013

Nobody can force to sign the documents. Do not sign or succumb to any family pressure. Or else, file a complaint. Let them file civil proceedings for share, or partition. It is better to defend, where the stroy told by you could be proved and they may be non suited.

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