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Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2890
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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Im a physician who owes a debt of $70,000 on a business loan

Resolved Question:

I'm a physician who owes a debt of $70,000 on a business loan taken out as a DBA. The loan is not on my personal credit. If i form an LLC and eventually have to default on the loan, am I personally responsible for the debt or does the responsibility go to the LLC?
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 6 years ago.

Terry L. :

Hi and thank you for your question. In the future, you can request me to answer any further questions.

Terry L. :

Based on your fact pattern, you did not have the LLC formed at the time you incurred the debt, so it is a personal obligation then, and if you default, they could pursue you personally for it.

Terry L. :

If you had the LLC formed first, and signed only as owner of the business, then you would be ok if there was no personal guarantee made.

Terry L. :

but LLC or Scorp is a good way to shield your personal assets from business issues, just watch for the personal guarantees.

Terry L. :

thanks for your question, good luck

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