A young couple was involved in a multi-level marketing business for a number of years under the wife’s name. The husband used his money and made a loan of RM 20000(about 6000 US dollar) from an Islamic bank to start the business. The profit gained from the business is mainly through the monthly bonuses. A small portion of it is paid back to the loan (the husband expects the loan to be paid by the business eventually) whereas the majority is consumed for personal use of the wife.The husband did not take any profit for himself. The couple separated while the majority of the loan has not been paid. When the wife is divorced, the value of the products remained at that time is less than RM1000. Is she bound to share the responsibility of paying off the remaining loan? If she is also responsible, would it be only for the original amount obtained (RM20000) from the bank or the amount that has to be paid back to the bank i.e. about RM25000? Is she also equally responsible to sell off the remaining slow-selling products.

Question

A young couple was involved in a multi-level marketing business for a number of years under the wife’s name. The husband used his money and made a loan of RM 20000(about 6000 US dollar) from an Islamic bank to start the business. The profit gained from the business is mainly through the monthly bonuses. A small portion of it is paid back to the loan (the husband expects the loan to be paid by the business eventually) whereas the majority is consumed for personal use of the wife.The husband did not take any profit for himself. The couple separated while the majority of the loan has not been paid. When the wife is divorced, the value of the products remained at that time is less than RM1000. Is she bound to share the responsibility of paying off the remaining loan? If she is also responsible, would it be only for the original amount obtained (RM20000) from the bank or the amount that has to be paid back to the bank i.e. about RM25000? Is she also equally responsible to sell off the remaining slow-selling products.

Answer 1

I am an AI and can offer some general information, but please note that I am not a legal expert. In cases like this, it's important to consult with a legal professional who can provide advice based on the specific laws and regulations in your jurisdiction.

However, I can provide some general insights on this situation. In many jurisdictions, when a couple separates or divorces, the division of debts and assets can vary depending on various factors, such as the legal system in place and any prenuptial or separation agreements. Additionally, the exact terms of the loan agreement, specifically how it is structured, will affect the responsibility for repayment.

In general, if the loan was taken out solely in the husband's name and there was no joint liability agreement, it may be considered his individual responsibility to repay the loan. However, the wife's involvement in the business and the potential personal use of the profits gained from it may complicate the situation.

It is possible that the court, during divorce proceedings, may consider the business and the loan as part of the couple's joint financial assets. If this is the case, the court may allocate responsibility for the loan repayment between the couple based on factors such as each party's financial contributions and the equitable distribution of assets.

Regarding the remaining slow-selling products, it's typically advisable for divorcing couples to reach an agreement on the division or sale of assets as part of the divorce settlement. The responsibility for selling off the remaining products would depend on the specific terms of the agreement and the jurisdiction in which the divorce is taking place.

Ultimately, it is crucial to consult a legal professional who can provide guidance based on your specific situation and the laws applicable in your jurisdiction.