I am personal guarantor for loans in the small businees I own. Are they dischargeable in a personal bankruptcy?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
I am personal guarantor for loans in the small businees I own. Are they dischargeable in a personal bankruptcy?
Asked on May 18, 2009 under Bankruptcy Law, New York
Answers:
S.J.H., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 15 years ago | Contributor
These debts in all likelihood, will be dischargeable in a personal Chapter 7 bankruptcy unless they are secured by some colalteral such as a building etc. or if you signed a contract which deems these debts non-dischargeable. If you file Chapter 13 these debts will not be discharged buit rather will be part of a plan to pay them off within a period of time. If you are filing persoanl bankruptcy I suggest that you cease the business as well because if the business racks up more debt after the discharge, you will be responsible for these.
J.M.A., Member in Good Standing of the Connecticut Bar / FreeAdvice Contributing Attorney
Answered 15 years ago | Contributor
the answer depends on a number of different things, namely whether you qualify for bkcy and/or what form of bkcy your are filing. Generally, you may discharge personal debts in bkcy. I am not sure whether there are any lawsuits pending with respect to the loans - i.e. if you obtained a loan by fraud, the debt may not be dischargeable. However, if this is a simple loan agreement that you are not able to pay and you are filing for bkcy protection, then the loan should be discharged. The small business will remain on the hook for the loan.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.