Can My Husband Get a Commercial Loan

[justincase]

I live in Ohio
My husband is trying to buy a commercial property, I dont want to have anything to do with it, we filed our taxes joint last year and he needs a copy of the taxes to get the loan processed. I know they need his tax info but they are asking for a copy of the schedule A I am not sure why, I want to ensure that I will not be tied to this property in any way, I do not believe his income is sufficient enough to support the loan, will they use my info also? I am really concerned because of course the tax return has my SS# and all my income information, I make more and have 2 side jobs that were also included on our tax return. I really need to know how they are using my info. He has purchased a property last year and did a home equity loan and I never signed away my dower rights or anything for that matter, when I went to process a loan without him they told me he would have to sign away his dower rights, so I am really concerned that something shady is going on his business partner (who cannot get a loan because he just filed bankruptcy is not the most upstanding person) and may have found some loop hole, can anyone help me out with this?

[Antigone]

I live in Ohio
My husband is trying to buy a commercial property, I dont want to have anything to do with it, we filed our taxes joint last year and he needs a copy of the taxes to get the loan processed. I know they need his tax info but they are asking for a copy of the schedule A I am not sure why, I want to ensure that I will not be tied to this property in any way, I do not believe his income is sufficient enough to support the loan, will they use my info also? I am really concerned because of course the tax return has my SS# and all my income information, I make more and have 2 side jobs that were also included on our tax return. I really need to know how they are using my info. He has purchased a property last year and did a home equity loan and I never signed away my dower rights or anything for that matter, when I went to process a loan without him they told me he would have to sign away his dower rights, so I am really concerned that something shady is going on his business partner (who cannot get a loan because he just filed bankruptcy is not the most upstanding person) and may have found some loop hole, can anyone help me out with this?

Is your husband looking for this loan in his personal name or in the name of his business? What percentage of the business does he own? What percentage does the bankrupt partner own? How long have they had the business and what is the corporate structure?

I know, lots of questions but answers will help provide clarity.

[justincase]

He is trying to get the loan in his personal name, he would be 100% and the bankrupt partner will not have any legal financial ties but he will be running the business (this is a night club that has had 4 owners in 2 years and just cant get enough traffic to survive)
my husband is supposed to turn the club over to him in 2 years and step away from it. The community around this club has fought the liquor license everytime and just made it difficult to run, I want to stay far away from this

[Antigone]

He is trying to get the loan in his personal name, he would be 100% and the bankrupt partner will not have any legal financial ties but he will be running the business (this is a night club that has had 4 owners in 2 years and just cant get enough traffic to survive)
my husband is supposed to turn the club over to him in 2 years and step away from it. The community around this club has fought the liquor license everytime and just made it difficult to run, I want to stay far away from this

I don't blame you for being extremely skiddish. You may have cause for concern. If your husband is using your joint personal tax retuns in order for the banker to cash flow the deal they may be including you in the deal as well.

Do you know who the broker or the banker is? Call him if you do

I don't know too many reputable commercial bankers who will loan money on a night club, in a personal name with insufficient cash flow. The key word here being reputable.

You might want to check your credit and even have a credit freeze placed by the bureaus so that if anyone checks your credit, they will be denied and you will be notified.

[justincase]

Thank you so much for your help, I dont have any info on this he just asked for the schedule A which concerned me, he had already tried to get a loan and was denied he is now going in with a co-signer, my biggest concern is to make sure I am not tied into this, I just dont think things are going to go the way he thinks it is he will hold the mortgage and the liquor license, he has never had any experience with this, but just insists this is a no lose situation. Will a credit freeze hamper me I have over an 800 credit score I never pay anyone late and will be debt free in 16 months (God Willing) , I do not want to get set back in anyway so if his stuff goes wrong it will be on him and not on me. (I know this seems harsh but we are pretty close to being seperated so now is not a good time to tie anything up together) I am also going to tell him I want to sign something stating I am not liable what should I be asking for, I know I need more than an affidavit.

[Bubba Jimmy]

If your husband filed a joint return then that is the only tax return he could provide to the lender when they ask to see a copy of his tax return. This is meaningless to you. Unless you sign a note promising to repay the loan you are not liable for the loan even though your husband showed them a copy of your joint tax return. No lender will offer a commercial loan without such verification of income and expenses. It is a standard practice and without providing the tax return your husband would be unable to get any kind of commercial financing. Since his name is on the return he is entitled to a copy of it and also entitled to provide that information to anyone he chosed in the course of conducting his business affairs. Again, nothing about showing them your joint tax return can in any way obligate you for the loan.

Regarding Schedule A, that is simply one of the forms that comprise the tax return. Why does it concern you? Schedule A merely reports the itemized deductions such as mortgage interest, property taxes, charitable donations, and so forth. I would not want to loan money to someone who is overstretched as evidenced by large home mortgage interest deductions on the Schedule A of the tax return. This is all required so that the lender can evaluate whether your husband is credit-worthy or not.

[Antigone]

If your husband filed a joint return then that is the only tax return he could provide to the lender when they ask to see a copy of his tax return. This is meaningless to you. Unless you sign a note promising to repay the loan you are not liable for the loan even though your husband showed them a copy of your joint tax return. No lender will offer a commercial loan without such verification of income and expenses. It is a standard practice and without providing the tax return your husband would be unable to get any kind of commercial financing. Since his name is on the return he is entitled to a copy of it and also entitled to provide that information to anyone he chosed in the course of conducting his business affairs. Again, nothing about showing them your joint tax return can in any way obligate you for the loan.

Regarding Schedule A, that is simply one of the forms that comprise the tax return. Why does it concern you? Schedule A merely reports the itemized deductions such as mortgage interest, property taxes, charitable donations, and so forth. I would not want to loan money to someone who is overstretched as evidenced by large home mortgage interest deductions on the Schedule A of the tax return. This is all required so that the lender can evaluate whether your husband is credit-worthy or not.

You are right that merely presenting the joint retuns will not tie her to the loan application, but I can see her concern about using the cash flow from her earnings to help qualify him.

Unless he makes it perfectly clear to the lender that she is not going to support this loan they might just have other ideas.

I've never separated a spouses earnings out of the cash flow. I am not quite sure how and if that will work.

[Bubba Jimmy]

Lenders are well aware of how joint tax returns work. That is why, in addition to the tax return, they also require copies of forms W-2 and for self-employed people 1099-MISC. They want the full picture so they can make their determination. No lender would loan assuming that the spouse will be paying off the loan if they don't have the spouse's signature on the note. Banks are quite sophisticated in evaluating credit worthiness. The OP has nothing to worry about from the husband presenting his tax return, which contains their joint information, to the lender. If she does not sign the note then she is not responsible for the loan.

However, if she's contemplating divorce and the husband defaults on the loan then the lender COULD potentially attach assets that she might have some interest in, so as always, if the spouse defaults on debts it could impact her. But not in the sense of obligating her for repaying the loan. What our spouse does ALWAYS impacts us in some way, but that has nothing to do with presenting the tax return to the lender or the Schedule A issue which seemed to be the matter of concern.

[justincase]

That is one of the major concerns for me, we are heading towards divorce, and I dont want any tie ins to his business dealings, the schedule A is not of great concern I was just curious because none of the info on the A is his, the mortgages are all solely in my name, he does pay half of the first mortgage and nothing else but there are 3 mortgages, I have asked him to leave several times but he wont. For this commercial loan he has established an LLC in our 4 year olds name so he can apply for the business loan, this all concerns me greatly and I just dont know what to do he refuses to leave and I dont know if getting a legal seperation means he has to leave, I think he would still stay. I am really concerned about the impact of his decisions especially if the the lender could potentially attach assets. I have all the assets (he purchased a condo about 8 months ago that he has not been able to sale and is sitting empty so he has something but I dont know if that cuts it or not) I really wish he would move into it and not tie this address into his business dealings. Should I have any concerns about the LLC in my 4 year olds name?

[Bubba Jimmy]

I was just curious because none of the info on the A is his, the mortgages are all solely in my name, he does pay half of the first mortgage and nothing else but there are 3 mortgages,

Everything on the tax return is jointly his and yours. On a joint tax return there is no such thing as "his" and "yours" except for some very specific forms, and Schedule A is not one of them. It is a form that is part of his tax return.

I would be concerned about the business in the name of a four year old. I would write to your state's registrar of corporations and ask that your child's name be removed from any connection with any such business. This appears to have fraudulent intentions, and I would make it a priority to get that fixed. As far as getting your husband to move, that's something I can't help with but I will tell you that where he lives won't affect much. I think you need to consult with a good family law attorney.