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Hello - my name is ***** ***** I am happy to assist you today. What is stated in the personal guarantee documentation is what will control in this instance so I would need to see what it says with regard to the guarantee going away with any change in ownership. If the documentation does not discuss the issue, the law would be such that all individuals that provide a personal guarantee for a loan will be responsible for the debt whether they lose their interest in the LLC or not. I hope this helps, please feel free to ask any follow up questions you may have and I will get right back to you. Thanks, David
Thank you for the additional information. Each of the guarantors can be held responsible for the full amount of the loan. In this instance, if two guarantors file for bankruptcy the lending entity will look to the other two guarantors for full payment.
If the terms of the loan state it is due in full October 1, 2019, if it is not paid in full at that time the entity that gave the loan could take you to court. If you are planning to continue making payments until it is fully paid off then I would make contact with the entity that made the loan and state what you are wanting to do and see if they will agree. The alternative for them is to go to court and end up getting a payment plan anyway so they have every motivation to let you pay the loan out over time. However, if you continue to make monthly payments and don't get them to agree to this instead of full payoff on October 1st, they could take you to court but it would be foolish to do so if they are receiving ongoing payments. If the ex LLC members file for bankruptcy that does not mean you or the business have to file for bankruptcy. From what you have stated the loan is the only thing legally tying the four original LLC members together and bankruptcy of one of the group does not necessitate bankruptcy for the rest of the group. Here, if you are not going to pay off the loan on October 1st, I would suggest contacting the company that loaned the money and work out an alternative to the full payout before you go into default.