Bankruptcy Law Questions? Ask a Bankruptcy Lawyer.
I have a business and I am considering applying for an SBA Express loan to use as a Line of Credit for operating expenses. I have been told that if I were to default through bankruptcy that the amount owed on the SBA express if there was any would stay with me and I would still have to pay it back. Not unlike an IRS judgement on taxes.
The corporation is an S corp and it is personally guranteed with my signature and business assests.
Who told you an SBA loan is not dischargable in a Bankruptcy?
There are no exceptions to discharge for SBA loans, and SBA loans are not treated similarly to taxes.
This means that if you file a personal Bankrutpcy, your personal liability for the loan will be discharged, but your business liability for the loan will remain (unless you also file a business Bankruptcy).
I think this is what you wanted to know. If not, please let me know.
I was concerned about the business filing bankruptcy. So to clairify, if the business files bankruptcy then the loan will be discharged?
If the business files a Bankruptcy, the business will no longer be liable for the loan, but you will remain personally liable for the loan - even if the business files a Bankruptcy - unless you also file a personal Bankruptcy.