Loans from family

[waron2fronts]

My ex is employed by his father and lowballing his income. If he got a $70,000 loan from his father and in 6 years, hasn't paid a single $ back to the principal, can I make an argument that this should be figured into his income?

Pls help.

[NBDad]

Why would you? It'll make absolutely no difference from a support perspective.

You force him to add a 70,000 asset from a personal loan....he then gets to add a corresponding 70,000 debt. End result.... $0

[ONdad]

If the loan is through his employer and at 0% interest, he should be claiming the prevailing interest rate on that loan as a taxable benefit. In this case, it would be less than $3k a year.

I see what you mean though, that the father won't ever call the loan, so he's getting the loan in lieu of a higher income to reduce support payments. I think you'd have to talk to a lawyer about the likelyhood of a judgement in your favour in this case. You'd have to show what the intention of the 'loan' was.

[Mess]

I think she's trying to imply it wasn't a loan at all, that he was given the money and it should be considered income.

[ONdad]

Yeah, that's what I addressed in the second paragraph. I think that it might be tough to prove, but I'm sure that most judges would have seen it before. The best approach might be to do some research to find out what salary range would be paid to someone with his position and experience in his area and ask a judge to impute the average of that range. If he's failed to make even interest payments, and if it were truely a loan, he should have claimed the lack of interest as a taxable benefit, as I said. If he didn't do that, then it strengthens your claim that it's not being treated as a loan by either him or his father.

If you can show that no payments have been made it would likely help your case and, if adding almost $12k per year to his current salary puts him in the salary range you come up with, it will strengthen your case. That said, all you may need to do is show that he could be making much more if he was employed by an arms-length employer and get an income imputed.

[DougL]

At any point in time the father can call it a gift and then it count nothing for income. The fact that he put it into an interest free loan is interesting but, you have not got a leg to stand on from where I am viewing it with regards to imputing that "loan" income on him in order to increase spousal support....sorry but you are out of luck as I see it...

[Mess]

He's working for the father, the income is lowballed, and then money is given as a "gift". If your company gives you a "gift" it is a taxable benefit.

[ONdad]

Maybe, but she still may be able to show that he's underpaid according to the market and also just happened to receive a gift from his employer. I'm sure that would raise any judge's eyebrows.

[dadtotheend]

The real issue is that the worker's income s/b imputed to him, regardless of the $70K loan, which should be included in equalization of family property, if bona fide.

[Kenny]

Interestingly enough, I am in the exact opposite situation. I am a full-time custodial father of my two children in Ottawa, Ex-spouse is in NB. She owes her father about $20,000.00 in personal unsecured family debt. She tried to play this issue to support her being poor 'card' to reduce child support. At the very best, the most she will be able to prove is a debt that may or may not help with her undue hardship claim.

My argument that she used the $20,000.00 to boost her home's value through renovations went on deaf ears, although she was given a 60 day adjournment to prepare a case for undue hardship!

The point is, family money is, and always has been a contentious issue before, during and, obviously, after marriage.