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 Phillips Esq. Your Own Question
Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
Satisfied Customers: 19285
Experience:  B.A.; M.B.A.; J.D.
16551887
Type Your Bankruptcy Law Question Here...
Phillips Esq. is online now
A new question is answered every 9 seconds

My parents had a business and a friend loaned them (estimate)

Resolved Question:

My parents had a business and a friend loaned them (estimate) $80k for the start of the business. There are papers stating that they would pay them back, but during the financial crisis the business went under. They are now filing suit. Can my parents go to jail for this? If they file for bankruptcy will it be better for them?
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  Phillips Esq. replied 6 years ago.

Was the money lent to them personally or to the business?

 

Was the business incorporated or sole proprietorship?

Customer: replied 6 years ago.
The money was lent for the business and I think it was a sole proprietorship
Expert:  Phillips Esq. replied 6 years ago.

Thank you for the additional information.

 

Now back to your initial post:

 

My parents had a business and a friend loaned them (estimate) $80k for the start of the business. There are papers stating that they would pay them back, but during the financial crisis the business went under. They are now filing suit. Can my parents go to jail for this?

 

Response 1: No, they cannot. They did not do anything illegal. They just borrowed money that they cannot afford to pay off now.

 

If they file for bankruptcy will it be better for them?

 

Response 2: Yes, the debt would be wiped out if their bankruptcy case is successful. Once the bankruptcy case is filed, the lawsuit would be stopped.

 

 



Edited by AttorneyPhillips on 9/6/2010 at 6:23 PM EST
Phillips Esq. and other Bankruptcy Law Specialists are ready to help you

Related Bankruptcy Law Questions