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CalAttorney2
CalAttorney2, Attorney
Category: Bankruptcy Law
Satisfied Customers: 10244
Experience:  Civil litigation attorney for individuals and businesses.
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I ran a small from 2001 - march 27th 2015 - it is a corporation

Customer Question

I ran a small biz from 2001 - march 27th 2015 - it is a corporation - I sole owned and operated - short story - 2008 hit me badly - i filed personal bankruptcy in 2010 - continued with corp biz - hit again 2012 losing 35% of business revenue - i supplied local hospital wth patient admission kits- then umbrella out of state health care took over - cutting local suppliers like me - came to decision to wind up - sold inventory/ goodwill to my webmaster to cover outstanding vendor /services bills - nothing left - except 40k loan unsecured business to bank from 2008 - interest approx 200.00 per month - what is going to happen tomorrow when there are no funds to pay interest due - appreciate your expertise and advice in this matter
Submitted: 2 years ago.
Category: Bankruptcy Law
Expert:  CalAttorney2 replied 2 years ago.
There are 3 possible answers:1) the loan was made to the Corp. only (you were not a guarantor): the bank will be left without any recourse, they may write you and demand payment, etc. and may even sue the defunct corporation and get a judgment, against the corporation, but without any assets to collect against, nothing further will happen. 2) the loan was made to the Corp. but you were a guarantor - you listed the loan in your bankruptcy and the obligation was discharged as part of your personal bankruptcy case: same result as option 1. The bank will be left without any recourse. You will want to contact your bankruptcy attorney as the result is going to be a little messier here - you retained the line of credit after the bankruptcy, but arguably it was only for the corporation and not for you personally therefore the personal guarantee was discharged and should no longer be enforceable (there is a slight possibility that the bank can argue it should still be open, and you will have to make a motion to reopen your bankruptcy, similar to Option 3).3) The loan was to the corp., you were a guarantor, and you did not list the debt in your personal bankruptcy: the bank can pursue you for the unpaid debt, and get a judgment against you for the deficiency. You can try to reopen your bankruptcy and amend your schedules to add this debt (do not try to do this yourself without an attorney, this is hard to do and you will likely lose the motion if you do it without counsel). Alternatively, you can wait until 7 years after your last bankruptcy discharge and file a second time, this time including this debt in your bankruptcy schedules and eliminating this debt as well.