Is person-person lending/borrowing protected by law?
"By protected you mean what exactly? In the US, generally you'd get a promissory note signed by B saying ""B promises to repay A such and such amount on such and such terms"". In case of default you can sue in a court of law, and the promissory note will be the evidence for your case. In case of B declaring bankruptcy, you'd submit the promissory note to the bankruptcy court to get in line with all the other creditors. Similarly in all the rest of the world, you make a contract, you enforce the contract in courts." "For person A to be protected (meaning able to recover some or all of the money should the other party try to welsh on the deal), the two of them must have entered into a valid, binding contract where both parties acknowledge and agree to the debt and the terms. Such a contract is subject to the Statute of Frauds, a collection of laws governing contracts which is mostly borrowed from English common law. The basics are that in all cases, a ""contract"" is only formed when both parties agree, technically when one party accepts an offer made by the other party. Both the offer and acceptance must be made sincerely. For a contract, once entered, to be enforceable, proof of the contract's existence and terms must itself exist. Certain types of transactions (real estate, large amounts of money) require contracts to be in written form, and witnessed by a trusted third party (in most cases this party is required to be a notary public). And contracts must have a certain amount of quid-pro-quo; contracts that provide a unilateral benefit can be thrown out on a case-by-case basis. A contract that simply states that Person B owes Person A money, without stating what benefit Person A had provided Person B in return for the money (in this case A gives B the money to begin with), is unenforceable. The benefits must of course be legal on both sides; a contract to deliver 5 tons of cocaine will not be upheld by any court in any free country, and neither will any contract attempting to enforce hush money, kickbacks, bribery etc (though some toe the line; one could argue that a signing bonus is tantamount to bribery). In some cases even seemingly benign clauses, like ""escape clauses"" allowing one party a ""free out"", can make the contract unenforceable as they could be abused to the severe detriment of one party. There are also jurisdiction-specific rules, such as limits on ""finance charges"" for debts not owed to a ""bank"" (a bar, for instance, cannot charge 10% on an outstanding tab in the United States). This is HUGE for your example, because if Person A had specified an interest rate in excess of the allowed rate for non-bank lenders, not only will the contract get thrown out even though Person B agreed to the terms, but Person A could find themselves on the hook for punitive damages payable to Person B, FAR in excess of the contracted amount. Given that the agreement meets all tests of validity for a contract, if either party fails to perform in accordance with the contract, causing a loss or ""tort"" for the other party, the injured party can sue. Generally the two options are ""strict performance"" (the injuring party is ordered by the court to comply exactly with the terms of the contract), or payment of net actual damages and dissolution of the contract. In your example, if Person A had lent Person B money, strict performance would mean payment of the debt in the installments agreed, at the rate agreed; actual damages would be payment of the outstanding balance plus current interest charges (without any further penalty). Notice that it's ""net"" damages; if Person A was to issue the loan in installments, and missed one, causing Person B to suffer damages from the loss of expected cash flow directly resulting in their failure to pay according to the terms, then Person B's proven damages are subtracted from A's; very often, the plaintiff in a suit to recover money can end up owing the defendant for a prior failure to perform. There are further laws governing bankruptcy; basically, if the other person cannot satisfy the contract and cannot pay damages, they will pay what they can, and the contract is terminated with prejudice (""no blood from a turnip"")." "Yes, it is, under some circumstances (basically, a piece of paper saying ""John Doe borrowed Josh Shoe 100 USD"" is not enough). Usually, the paper should include: This is the case for Czech Republic, I believe it's similar for other countries as well. Remember that without the repair date, you have very complicated position forcing the person to give you the money back. As well, there's a withdrawal of rights, i.e. after X years after the ""repair date"", you cannot force the person to give you the money. You have to send the case to the court in some period after the ""repair date"", if you don't have the money yet."
You can be a co-borrower on the property that your father owns. Some Banks require that you also be part owner of the property, some banks do not require this. You can take a home loan for a new property, normally Banks will ask you of all your current loans [auto/other home/personal/ etc] to determine the amount they will be ready to lend. Edit: The first loan I believe your father already has a property in his name ... your father can apply for Loan against property ... if he does not have sufficient income, then you can guarantee the loan [ie co-sign on the loan, some banks allow this ... however there is no tax benefit on this loan]  .   The second is the Home Loan for the balance amount that you would get it … Both the loans can be taken from the same Bank, there would be a overall cap as to the amount of loan a Bank would give depending on your income, further the finance for this house will only be to the extent of 80% of the value. "&gt;If Nike went bankrupt, should Lebron James NBA salary be taken from him?  Well no, because Nike doesn't own the NBA (that I am aware of anyway),but LeBron might lose his endorsement income via Nike.  The point I am trying to make is bankruptcy law (both corporate and personal) were put into place for individual protection.  It affords us all a kind of ""do over"".  To make it a regular business practice, and in some cases it's your ENTIRE business plan is (in my opinion) unethical and a manipulation of the laws." "My biggest concern with this plan is that there's no going back should you decide that it is not going to work, either due to the strain on the relationship or for some other reason.   If you were borrowing from a relative in place of a mortgage or a car loan, you can always refinance, and might just pay a little more interest or closing costs from a bank.  Student loans are effectively unsecured, so your only option for a ""refinance"" would be to get a personal, unsecured loan (or borrow against existing collateral if you have it). You are going to have a tough time getting another 50k unsecured personal loan at anywhere near student-loan rates.   The other negative aspects (overall risk of borrowing from family, loss of possible tax deduction) make this plan a no-go for me. (I'm NOT saying that it's always a good idea to borrow from family for homes or cars, only that there's at least an exit plan should you both decide it was a bad idea)." &gt;Does he manipulate the Corporate BK laws by playing a Corp shell game and filing for BK protection - Yes.  Is that like how I manipulate the laws of physics when I walk across the street? All parties are well aware of securities and bankruptcy law. It's not like he gets federal bankruptcy laws changed halfway through his business deals. Companies go bankrupt all the time, just because he lends his brand to a business doesn't mean that he should be personally responsible for anything. If Nike went bankrupt, should Lebron James NBA salary be taken from him? Trying to forcefully reclaim the money will ruin the relationship.  In general it's bad practice to loan money to family. When you start confusing morality with legality is when you enable corporations to take advantage of you.  Consider the scenario if the roles were reversed. If the bank owned money to *you*, do you think they would hesitate to default on that obligation for even a nanosecond if it was in their best interests to do so? You should only loan money to friends or relatives if you are fully accepting the possibility of never ever getting that money back.  And in this situation it can happen that you will be forced to give him a very large loan if something bad ever happens to him. (Paying the monthly rates instead of him and expecting he will someday pay it back to you is technically the same as loaning him money).  Something might happen in the future which will result in him not paying his monthly payments. Maybe not now, but in 5 years. Or 10. The economy might change, he might be out of a job, his personal values might change. A house mortgage is long term, and during that time a lot can happen. It is highly unlikely that this would be approved by a mortgage underwriter.   When the bank gives a loan with a security interest in a property (a lien), they are protected - if the borrower does not repay the loan, the property can be foreclosed on and sold, and the lender is made whole for the amount of the loan that was not repaid.   When two parties are listed on the deed, then each owns an UNDIVIDED 50% share in the property.  If only one party has pledged the property as surety against the loan, then in effect only 50% of the property is forecloseable.  This means that the bank is unable to recoup its loss.   For a (fictional, highly simplified) concrete example, suppose that the house is worth $100,000 and Adam and Zoe are listed on the deed, but Adam is the borrower for a $100,000 mortgage.  Adam owes $100,000 and has an asset worth $50,000 (which he has pledged as security for the loan), while Zoe owes nothing and has an asset worth $50,000 (which is entirely unencumbered).  If Adam does not pay the mortgage, the bank would only be able to foreclose on his $50,000 half of the property, leaving them exposed to great risk.   There are other legal and financial reasons, but overall I think you'll find it very difficult to locate a lender who is willing to take that kind of risk.  It's very complicated and there is absolutely no up-side.   Also - speaking from experience (from which I was protected because of the bank's underwriting rules) and echoing the advice offered by others on this site: don't bother trying.  Commingling assets without a contract (either implicit by marriage or explicit by, well a contract) is going to get you in trouble.