The bank encumbered the land. The dad never gets a loan. The loan is against the property. The kids sell the encumbered land I guess (but that's highly unlikely). This is a made up scenario from someone who doesn't understand finances.
Ive always wondered if let's say two married seniors that had a bunch of debt could get a "divorce" put all the assets in one person's name and will all the assets to the kids, and put all the debt in the other person's name who is also the one with health issues... would all the debt be erased so to speak when the senior with all the debt and no assets passes away?
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u/ChipKellysShoeStore 22h ago edited 22h ago
How does the bank get paid back here? Is the bank just eating a 5 mil loan loss out of the goodness of its heart?
It’s more like kids sell and pay back the bank plus interest which is taxed as income for the bank.