How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Ellen Your Own Question
Ellen
Ellen, Attorney
Category: Business Law
Satisfied Customers: 36714
Experience:  25 years of experience helping people like you.
9968427
Type Your Business Law Question Here...
Ellen is online now
A new question is answered every 9 seconds

I am a 50% partner in a business for the last 3 years. we ...

Resolved Question:

I am a 50% partner in a business for the last 3 years. we took out a loan to start the business, and since we started the business we never took any profit home. My question is that I want to get out and my partner wants to stay. What is my obligation, if any to the loan and cant I just walk away from the business? The business is worth about $100,000 and our whats left on our loan is $73000. Please help me.
Submitted: 8 years ago.
Category: Business Law
Expert:  Ellen replied 8 years ago.
Hello,
Did you sign personally for the loan? Is the laon secured or unsecured?
Customer: replied 8 years ago.
The loan is under the business name. My partner and I are personal guaranteer’s. I do not know if it is secured or unsecured.
Expert:  Ellen replied 8 years ago.
Hello,

Generally speaking, a personal guarantor of a loan can be held liable for the entire outstanding balance if the original debtor does not pay. In your case, from the facts given, both you and your partner personally guaranteed the loan. Usually lenders require guarantors to sign "jointly and severally". Joint and several liability means that the lender can collect the entire amount of the loan from either guarantor. Assuming you and your partner guaranteed the loan with joint and several liability, the lender can collect 100% of the loan balance from either of you in the event of a default on the loan by the business. If the lender were to collect 100% from you, your remedy would be to sue your partner for his share of the monies.

One remedy to this situation would be to request that the lender release you from the guarantee.

If you have any additional questions or if I can be of any further assistance please click "ACCEPT" and then submit another question directly to me. Otherwise simply click the "ACCEPT" button(s) next to the answer(s) so that I can get credit for my work.

Best wishes for a successful outcome.

Please consider clicking "BONUS" as a nice way of saying "thanks" for a job well done. Clicking "FEEDBACK" to leave your positive comments is always greatly appreciated.

The information provided is general in nature only and should not be construed as legal advice. By using this forum, you acknowledge that no attorney-client relationship has been created. You should always consult with a lawyer in your state
Ellen and 4 other Business Law Specialists are ready to help you