QUESTION
who is responsible for signed quarantee for an s corp upon their death
Asked on Mar 10th, 2013 on Business Law - New Jersey
More details to this question:
i am running business-husband signed guarantee-was not husband at the time-paying wells fargo-comes out of business cking automatically-husband died 10/21/10-do not know terms of guarantee-after 2 1/2 years bank of america sent me a letter claiming husband signed a guarantee in 2003-not married at the time-married in 2008-i am not responding to boa - but am i responsible for wells fargo? no defaults to date, but cannot really afford payment to wells fargo- i inhereted business as i am now his wife
1 ANSWER
If the business is a sole proprietorship, then the business operator/owner will be liable for the debt, regardless of the existence of the guarantee. If the business is an LLC or a corp., then only the signer of the guarantee is liable for the debt, and then only under specific circumstances. What those circumstances are depends upon the type of guarantee. When you inherited the business, you inherited the business debts, and unless you are the business (sole proprietor), only the business owes for its debts. If the debts are being paid, then there is no default and no issue of repayment, since it is being done. call me if you have more questions. (732)747-3700
Answered on Mar 18th, 2013 at 3:47 PM