How can we protect our assets/estate from Girlfriends financial liabilities?

Alex_Mucho_Debto

Hi,
I'll keep this as a tl;dr as it is truly a horrendous situation - I live with my girlfriend in the UK, I am British, she is Indian and on a Tier 2 visa - my girlfriend lost both her parents and last remaining grandparent recently to COVID in India this month. She has 1 sister and none of the deceased had wills.

We have found out that she was a named director on companies in India that have potentially large financial debts - anywhere from 100k to 10mil GBP (we haven't even begun untangling this yet). She was signed up, along with her sister, as directors to these companies in the last decade without her fully understanding what that meant in terms of her responsibilities - and until her Dad passed had no idea the scale of the issue. The only surviving directors of the companies are her and her sister - these are not limited companies like in the UK, so  the debt would appear to be on the shoulders of the directors.

Previously the claimants against the companies had filed both civil and criminal claims against her father - so it is very likely both her and her sister will face similar in the coming months. Her dad hadn't discussed these in detail - and it seems her sister was named on a criminal action without her knowledge.

Potentially the value of her parents estate may cover some or all of the liabilities, though only if the debt is on the lowest end of the scale. Also the estate is not liquid... My girlfriend probably has a net worth of ~40k which would be all her savings.

I have said that we need to talk to a lawyer asap to start understanding her situation better; but are there any additional steps that we should take - has anyone seen anything like this before? I own my flat (mortgaged) and she does not contribute to this beyond bills as the property and equity is in my name. We had talked about marriage next year, but I am worried that we could end up financially ruining both of us if we make any legal ties before the estate and legal issues are fully resolved (she might have to get used to being partners for a while more!)

Grumpy_chap

How long have you known your girlfriend?
I don't wish to dismiss the situation and it is clearly heartbreaking if true, however there are some inconsistencies in the information you have provided (which may be your haste in putting the post down) and this does sound rather like the foundations of a scam.

Assuming the companies are Private Limited Companies in India, this article suggests the liabilities are constrained in much the same was as in the UK:
https://uk.practicallaw.thomsonreuters.com/w-006-4210?transitionType=Default&contextData=(sc.Default)&firstPage=true
Otherwise, the companies would have to be OPC (one-person companies) or Partnerships, much like sole trader and partnership in UK with open liabilities but then no Directors.  OPC in India is also limited liability, but can't be this as if it included your girlfriend plus another, then it would not be OPC.

FaceHead

What @Grumpy_chap says is worth consideration. Particularly things like "the claimants against the companies had filed both civil and criminal claims against her father" makes no sense. In the UK at least, claimants file claims, and claims are not criminal. Charges are criminal and very rarely brought by anyone other than the state. I agree that it does rather sound like the next step is an email which says 'I'm in jail and need a 20k bail to get out'

I shall however approach it as if it's not a scam. 

Given that she didn't have a full understanding of her responsibilities to the company(s), it seems unlikely that a creditor in India would be able to get a court order to seize her assets in the UK. Sounds like she'll lose everything in India and you guys will just have what you have here in the UK. For numbers this big, however, you need to be taking legal advice and there is plenty of free legal advice available for starters. You need to see these 'claims', company registrations, accounts etc. before taking any action, and once you have all the documents get some legal advice.  

Alex_Mucho_Debto

Grumpy_chap said:

How long have you known your girlfriend?
I don't wish to dismiss the situation and it is clearly heartbreaking if true, however there are some inconsistencies in the information you have provided (which may be your haste in putting the post down) and this does sound rather like the foundations of a scam.

FaceHead said:

What @Grumpy_chap says is worth consideration. Particularly things like "the claimants against the companies had filed both civil and criminal claims against her father" makes no sense. In the UK at least, claimants file claims, and claims are not criminal. Charges are criminal and very rarely brought by anyone other than the state. I agree that it does rather sound like the next step is an email which says 'I'm in jail and need a 20k bail to get out'

Thanks and sorry - yeah I appreciate that it sounds dodgy - because neither me nor my girlfriend have the foggiest idea about how her family set things up (another one for legal advice...) - basically what we know is that there are 5 companies, each with a variety of liabilities.

I was having a look at the setup of these - they are private limited companies. It seems that on the liability front, her Dad was arrested (and spent a number of months in prison) due to fraud in 2018; which was the criminal aspect, then there are between 20 and 80 open civil actions (ouch) that name her dad as a defendant - again I don't know how this works, possibly because he was the director and he ran those companies. I think that the initial post I made (and also because we literally just had this thrust on us in the last 48h) I didn't realise they are PVT LTD companies; what we don't know is what assets they are registered against and any guarantees against their estate.

In terms of 'sounds like a scam'. Yup - too crazy for reality - but unfortunately not a risk here - I've lived with her for a number of years, and the court actions and directorships are all a matter of public record, well, as public record as you can get trying to dredge through the Indian court system! I knew back in 2018 about her Dad's situation, but wasn't aware that her name is also mentioned on the company docs as a Director.

sourcrates

I think you can ask opinion on here for as what its worth, but its extremely unlikely anyone will have come across a situation such as this before.

Due to the complexity, and the different legal systems in India, and here, its specialist expert legal advice you need on this.

Before you part with your money though, I would try the Legal Beagles website, they do actually have solicitors on the list of regular posters, although this may be a "toughie" its at least a place to start.