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Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
Satisfied Customers: 18809
Experience:  B.A.; M.B.A.; J.D.
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My company has an unsecured business line of credit note that

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My company has an unsecured business line of credit note that I am also am a personal guaranator. I am married but my wife did not sign the loan and it is not attached to our home mortgage. I am conerned that in this economy if I have difficulties in paying the loan what are my consequences. I have used the LOC to keep my company alive and loaned another company money owned by my wife out of the LOC. I am now living on my pensions from 3 unions and a personal pension plan like a 401k self-directed plan. I am asking if the economy worsens can this creditor take my home and pension if I can't pay?
Submitted: 7 years ago.
Category: Bankruptcy Law
Expert:  Phillips Esq. replied 7 years ago.
Is your name on the deed to your house?
Customer: replied 7 years ago.
Yes, my name and my wife's name are both on the deed.
Expert:  Phillips Esq. replied 7 years ago.

Thanks for the clarification;

I am asking if the economy worsens can this creditor take my home and pension if I can't pay?

Response: If you default, the creditor may come after the house but not the pension. Your pension and retirement benefits are exempt from execution pursuant to TCA Sections 26-2-105 and 26-2-111. As for the house, if you have a mortgage on the property and the house is currently under water (worth less than the mortgage securing it), your LOC would most likely result in the creditor sending your account to collections and subsequently to a law firm to file a lawsuit to recover the debt. If the creditor prevails, a lien may be put on your house but the creditor will not be able to force the sale since there will be nothing in there for the creditor after the sale--the proceeds will go to satisfy any mortgage you have on the property, then your homestead, then the creditor. There would not be any incentive for the creditor to foreclose when your property is already worth less than the first mortgage securing it.

Customer: replied 7 years ago.
the loan is an unsecured company LOC and my wife did not sign it or guarantee it. However, she and I both signed our mortgage. Does that change the dynamics.
Expert:  Phillips Esq. replied 7 years ago.
No. it does not. When you do not pay, your creditors will try to reach any assets that you may have to collect their money. Your house is one of your assets because you are part owner of the house and your creditors may go after the house.
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