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socrateaser, Attorney
Category: Business Law
Satisfied Customers: 39186
Experience:  Retired (mostly)
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i borrowed 20,000 dollars from a friend to start a new business,

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i borrowed 20,000 dollars from a friend to start a new business, i gave him 25% of stock in the new business and a co signer my sister was on the note . due to a flood where we lost virtually all our stock (merchandise) and other unusual circumstances the business failed.   i payed back approx 4000 dollars but have lost my entire investment also   i put in approx 80,000 in cash from a relative over the 8 years the business was in existance must i still pay back the balance of the loan
Submitted: 8 years ago.
Category: Business Law
Expert:  socrateaser replied 8 years ago.

If you signed a personal guarantee on the note, as your sister apparently did, then you are obligated to repay the loan regardless of your business failure. Your only recourse is to file for personal bankruptcy -- which would cause the creditor to attempt to recover from your sister -- meaning that she also would have to consider filing for personal bankruptcy.


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