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Ask Dave Kennett Your Own Question
Dave Kennett
Dave Kennett, Attorney
Category: Business Law
Satisfied Customers: 27689
Experience:  25 years practicing law
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i have a unsecured business line of credit that is in default.

Customer Question

i have a unsecured business line of credit that is in default. what cant i expect from the bank?
Submitted: 5 years ago.
Category: Business Law
Expert:  MDLaw replied 5 years ago.
What do you mean when you ask what can you expect?
Customer: replied 5 years ago.
what will the bank do to me??
Expert:  Dave Kennett replied 5 years ago.
Der Customer - The bank will probably file a suit against you and obtain a judgment from the court. Then they will attempt to collect the judgment by garnishing wages or attaching your assets. This is not a criminal matter so they can't "do" anything to you other than try to collect a debt. If your were a corporation and only the corporation owed the debt then they can only get a judgment against the corporation and not you personally.
Customer: replied 5 years ago.
it's not a corp but a sole proprietorship. it's @ 47k. i have a couple pieces of property. can they come after that?
Expert:  Dave Kennett replied 5 years ago.
If they obtain a judgment it will create a lien on the real estate however if there are already mortgages it is unlikely they would try to foreclose but it is possible.
Customer: replied 5 years ago.

it is possible to foreclose even if it was an unsecured line of credit?

Expert:  Dave Kennett replied 5 years ago.
Yes, once they get a judgment they will have a lien that can be filed against any and all of your assets. They can't just foreclose on the line of credit since that is unsecured.
Customer: replied 5 years ago.
basically, do i need to worry about losing my properties?
Expert:  Dave Kennett replied 5 years ago.
Well it depends on whether there are existing mortgages since most of the time it is not worth foreclosing on real estate if they are already encumbered. if they are free and clear then you should have some concerns since the creditor would have the ability to file the judgment as a lien and then foreclose.
Customer: replied 5 years ago.

one has about 25% of the value borrowed and the other has about 55% of the value borrowed...

Expert:  Dave Kennett replied 5 years ago.
There's just no way that I can tell you what the creditor will do as it is their decision. At this point there's nothing they can do except file a suit. Typically if they believe they can get the money they will do what they can to get it.

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