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Contempt
Can I sue my attorney for not clearing my name from business debts?

Can I sue my attorney for not clearing my name from business debts?

Full question:

In a California divorce settlement in 2003 assets were divided including real property and a family owned business. Attorney handled both the business sale and division of property. I have recently received notification that I am still responsible for a line of credit and credit cards on the business. My ex husband is not paying and is in collections per the bank they earned money from me stating I am responsible as he is not paying and has no money. Do I have legal case against my attorney for not clearing my name and responsibility from the business? Currently this attorney is dealing with the bank on my behalf at no charge as he did state a few months ago that he was concerned that he missed something in the divorce and business settlement.

Category: Contempt
Date: 04/07/2025
State: California

Answer:

If a court order is not followed, you can file a petition for contempt in the court that issued the order. You can ask the court to require the noncomplying party to pay for any losses caused by their failure to comply. The court has ongoing authority to enforce its orders and can hold the noncomplying party in contempt. You may also file a Judgment on Rule for Contempt, which is a prepared judgment for the judge to sign. A certificate of service is needed to prove that the petition was served on the opposing party.

However, a third party, like a creditor, is not bound by the divorce decree since they were not part of the divorce. The creditor will pursue its rights based on the original contract terms, and if you are listed as responsible for the debt, they can collect from you. The outcome will depend on the specific circumstances and the terms of your divorce decree. It’s advisable to consult a local attorney who can review your situation and documents.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

What is the basis of property received in a divorce settlement?

The basis of property received in a divorce settlement is typically determined by the division of community and separate property. In California, community property is generally split equally between spouses, while separate property remains with the original owner. The court considers various factors, including the duration of the marriage, each spouse's financial situation, and contributions made during the marriage. The specific terms of the divorce settlement will dictate how assets are allocated.

Is my LLC protected from divorce?

In California, an LLC may be protected from division in a divorce if it is considered separate property. However, if the LLC was established during the marriage or if marital funds were used to support it, it may be subject to division. Courts will evaluate the ownership and contributions of both spouses to determine whether the LLC is part of the marital estate.

How is an LLC treated in a divorce in California?

In California, an LLC can be treated as either community or separate property depending on when it was formed and how it was funded. If created during the marriage with marital assets, it is likely considered community property and subject to division. If it was established before marriage or funded solely with separate property, it may remain with the original owner. Courts will assess the specific circumstances of the case.

Is my wife entitled to half my business if we divorce in California?

In California, if the business was established during the marriage, your wife may be entitled to a share of its value as part of the community property division. The court will consider factors such as the business's growth during the marriage and each spouse's contributions. If the business was established before the marriage and not funded with marital assets, it may remain separate property.