QUESTION
Will a personally guaranteed business loan be included in bankruptcy?
Asked on Oct 31st, 2011 on Bankruptcy - Massachusetts
More details to this question:
I am going to file bankruptcy for my business. I want to avoid personal bankruptcy if possible. One of the loans for the business is personally guaranteed by me. Do I also have to file personal bankruptcy?
20 ANSWERS
Glen Edward Ashman
Yes.
Answered on Jun 02nd, 2013 at 10:28 PM
judith runyon
Yes.
Answered on Jun 02nd, 2013 at 10:25 PM
Bankruptcy Attorney serving Hampton, VA
at
Haven Law Group, P.C.
Update Your Profile
If you want to discharge your personal liability on that debt, you will have to file a personal bankruptcy.
Answered on Nov 02nd, 2011 at 9:42 PM
Yes, a personal guaranty would survive a business-only bankruptcy.
Answered on Nov 02nd, 2011 at 9:22 PM
Bankruptcy & Debt Attorney serving Jackson Heights, NY
at
Ruiz Law Group PC
Update Your Profile
Personal guarantees are not included in a business bankruptcy.
Answered on Nov 02nd, 2011 at 4:30 PM
Family Law Attorney serving McDonough, GA
at
South Atlanta Family Law
Update Your Profile
If you personally guaranteed the loan you will continue to remain personally liable for it after your business becomes insolvent or files for bankruptcy.
Answered on Nov 02nd, 2011 at 4:11 PM
Bankruptcy Attorney serving Livonia, MI
at
Charles J. Schneider, P.C.
Update Your Profile
Your guarantee can only be eliminated by a personal bankruptcy.
Answered on Nov 02nd, 2011 at 2:10 PM
Bankruptcy Attorney serving Concord, CA
at
William Rubendall Attorney at Law
Update Your Profile
If a business bankruptcy is filed all debts and assets must be listed. If a debt has been guaranteed by an individual who has not filed bankruptcy it must be paid.
Answered on Nov 02nd, 2011 at 1:52 PM
Spencer Hale
You either need to file bankruptcy personally, or make some arrangement to pay or settle the loan that was personally guaranteed.
Answered on Nov 02nd, 2011 at 1:32 PM
Bankruptcy Attorney serving Atlanta, GA
at
Jakob-Barnes Law Firm, LLC
Update Your Profile
You will be personally liable for any amount still owing the creditor after the business bankruptcy. A business bankruptcy does not affect your personal liability.
Answered on Nov 02nd, 2011 at 1:22 PM
Bankruptcy & Debt Attorney serving San Diego, CA
Partner at
Jackie Robert Geller Attorney at Law
The reason why a lender asks you to give a personal guarantee is for just this circumstance. If the business goes bankrupt without any assets, then the lender will look to you personally for payment. You would have to file a personal bankruptcy to avoid this, if you otherwise qualify.
Answered on Nov 02nd, 2011 at 1:06 PM
Consumer Bankruptcy Attorney serving Los Angeles, CA
at
Orantes Law Firm
Update Your Profile
For a business filing, you really should sit with an attorney to discuss all the issues in the case(s) to see what your best options are. If you personally guaranteed a loan, it appears difficult to avoid a personal bankruptcy filing, especially since business entities who file for Chapter 7 relief, do NOT get a discharge. Therefore, the better approach may be to file only at a personal level and not file for the business.
Answered on Nov 02nd, 2011 at 10:03 AM
Bankruptcy Attorney serving Myrtle Beach, SC
at
Law Office of Margaret L. Evans, PC
Update Your Profile
In order to avoid liability for a personally guaranteed loan, you would HAVE to include that debt in a personal bankruptcy, too. You would be better allowing the debt to go to judgment so that it would become an unsecured debt (if bankruptcy is the ultimate plan anyway).
Answered on Nov 02nd, 2011 at 9:42 AM
Trusts & Estates Attorney serving Camarillo, CA
at
Law Offices of Larry Webb
Update Your Profile
The reason lenders want personal guarantees is for recourse when the business fails or goes bankrupt. You will remain personally liable for the loan and bankruptcy is one course you can take.
Answered on Nov 02nd, 2011 at 9:02 AM
Chapter 13 Bankruptcy Attorney serving Bloomington, MN
at
Gregory J. Wald
Update Your Profile
You would have to file a personal bankruptcy in order to eliminate your personal liability pursuant to the guaranty for the loan. So, yes, you would need to file a personal bankruptcy if you cannot afford to pay that loan.
Answered on Nov 02nd, 2011 at 4:59 AM
Debtor's Rights Attorney serving Atlanta, GA
at
Theodore N. Stapleton, P.C.
Update Your Profile
It is very important that you get good advice before filing for your business. Many times it is not necessary to file for the business since debts are not discharged in a chapter 7 case and if the company has no assets it is judgment proof and there is nothing for creditors to get anyway.
Answered on Nov 02nd, 2011 at 4:58 AM
Bankruptcy Attorney serving Hayward, CA
at
Carballo Law Offices
Update Your Profile
Unless your business is an LLC or corporation then the business is you. Even if an LLC or Corporation, rarely it makes sense for that legal entity to file bankruptcy and usually is better to dissolve it and have you personally file the bankruptcy case and wipe out all debts. If you have personal guaranteed loans then they are coming after you after the bankruptcy of the LLC or Corporation anyway so why bother and you can save money and time by your filing a personal bankruptcy. Obviously, this is something you need to discuss with a highly experienced bankruptcy attorney to see what is the best option.
Answered on Nov 02nd, 2011 at 4:58 AM
Bankruptcy & Debt Attorney serving Longmont, CO
at
William Edward Zurinskas
Update Your Profile
Bankruptcy by a business entity such as a corporation, LLC, etc., will not relieve you from liability on your personal guarantee, unless the obligation is paid in full by the business entity.
Answered on Nov 02nd, 2011 at 4:53 AM
A business that files bankruptcy will not receive a discharge - it is just a way to dissolve it in an orderly fashion and distribute assets. You will remain liable for any business debts you guaranteed.
Answered on Nov 02nd, 2011 at 4:53 AM
Consumer Bankruptcy Attorney serving Worcester, MA
at
Law Offices of James Wingfield
Update Your Profile
If you file a bankruptcy (or otherwise default) on your business loan, the lender can (and almost certainly will) seek to collect upon all personal guarantees. If you have granted the lender a personal guaranty on a business loan, a bankruptcy for the business will not help you with regard to the personal guaranty. If you want to discharge your personal liability to the lender under the personal guaranty, you will need a personal bankruptcy.
Answered on Nov 01st, 2011 at 11:29 PM