Personal credit union loan taken out to pay business debts - bad bad idea

[BetterEveryDay]

A stupid thing to do in hindsight. Anyway. Husband has personal CU debt of 20k (now in arrears) taken out to pay for small home based business debts. His business is now failing, no way to pay debts, and now in danger of faulting on our mortgage as there's not enough income. I'm prudent with money, he is not. Short term he could get even a part time job to keep the mortgage at bay, but it doesn't solve the problem of the 20k debt. He engaged with MABS a year ago to restructure, but I think I could have done a better job myself. Credit union have always pushed hard, playing hardball, and insisting on everything in their terms, and MABS went along with it. It's a personal loan, and unsecured. Anyone know the status on this and how far they can take it? If it goes to court, is it an expensive process (we can't afford any legal fees). Is it worth trying to prove that the loan, although personal, went on business debts/expenses?

 

[Slim]

Hi. Sorry to hear that you're having these problems. As you asked, it is likely that the CU will press for an agreed repayment amount. If that fails, they may seek an instalment order in court and, if that fails, a judgement on your home. The legal costs won't be too bad at local court level. If you can keep your home, allow a judgement order, then the judgement order expires in 12 years. This is not legal advice.