Legal Question in Banking Law in Indiana

California resident default on Indiana loan

What jurisdiction does an Indiana Bank have in coming after a debt with a California resident. I invested in a company in Indiana that went out of business. The investors were joint and severly liable for the amount of $800,000 to the bank. There were a total of 7 investors, only 1 of which lived in Indiana, the rest live in California. The bank has gotten a summary judgement to collect this money from the remaining 5 who have not gone BK. What do you recommend? Do I wait for them to get California counsel and then declare BK? What type of attorney do I need to cover myself and my family? I'm married, but I invested in this business before my marriage. How difficult is it for the bank to come after me if my husband is not involved with this loan?

Asked on 11/13/05, 2:46 am

1 Answer from Attorneys

Carl Starrett Law Offices of Carl H. Starrett II

Re: California resident default on Indiana loan

Most states have what is called a "long arm statute" which gives the courts jurisdiction over out-of-state defendants. It is a very fact intensive analysis and you haven't posted enough facts to allow an attonrey to formulate an informed opinion, but we can at least provide some options.

After you were served with the lawsuit, you had 3 basic choices: (1) fight jurisdiction by making a "special appearance"; (2) waive any defects in jurisdiction and defend on the merits; and (3) wait and do nothing.

If they an Indiana judgment, they can register it in California and go after your assets out here. You can challenge the Indiana court's jurisdiction in the California proceeding, but that might be a difficult fight. You can file bankruptcy at any time, but I would file it before they put a judgment lien on any assets you have in California.

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Answered on 11/13/05, 1:52 pm

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