Can a Bank Collect a Loan That a Woman's Ex-Husband Took Before He Died While They Were Still Married ?

In Union National Bank & Trust Co. of Joliet v. Carlstrom, 134 Ill. App. 3d 985, 989, 481 N.E.2d 300, 89 Ill. Dec. 749 (1985), the plaintiff bank sued Ms. Carlstrom as the guarantor of a loan obtained by her ex-husband. Carlstrom, 134 Ill. App. 3d at 988. During the course of the dissolution of the Carlstroms' marriage, the bank provided to their respective attorneys detailed descriptions of the Carlstroms' assets and liabilities, for the purpose of reaching a property settlement. Carlstrom, 134 Ill. App. 3d at 988. The attorneys specifically asked the bank for "'everything' relating to the Carlstrom's assets." Carlstrom, 134 Ill. App. 3d at 990. Yet, the bank failed to disclose that Ms. Carlstrom had guaranteed a loan obtained by her husband while the Carlstroms were still married. Carlstrom, 134 Ill. App. 3d at 988. Years after the dissolution and after Mr. Carlstrom died insolvent, the bank attempted to collect the loan balance from Ms. Carlstrom. Carlstrom, 134 Ill. App. 3d at 988. Under the doctrine of equitable estoppel, the court held that the bank was precluded from collecting, because it had breached its duty to disclose the guaranty during the property settlement negotiations. Carlstrom, 134 Ill. App. 3d at 989.