Questions about Personal Guarantee Law
Person has a tax refund check coming and is holding off filing Chapter 7. Can this person use the funds to pay off the remaining balance on house or pay off the balance on one of the automobiles?This process is called pre-bankruptcy planning, and it is usually allowed. Bankruptcy filers are allowed to convert non-exempt assets such as an income tax refund into exempt assets such as one's homestead or one's car.
Is a corporate bankruptcy the only way that corporate debts get discharged in bankruptcy, or do these debts sometimes get discharged due to a personal bankruptcy?If the person includes the corporate debt in a personal bankruptcy, the personal liability for that debt can be discharged, but the corporation will still owe the debt.
What is the best choice to file bankruptcy on an LLC with multiple partners, chapter 11 or chapter 7?In a chapter 7, the LLC would be sold or all its assets would be dissolved, and the LLC would no longer be able to operate. There will be no negotiation of debts.
In a chapter 11, the Court could allow the LLC to continue to operate, and the debts of the LLC could be reduced or renegotiated if the person does not want to continue to operate the LLC.
A chapter 7 would be best, if the LLC, wishes to exist and operate, a chapter 11 is an option. Chapter 11 requires that a trustee be assigned; other than selling off all assets to pay back the pay that the credit is owed to; the trustee supervises the assets of the debtors allows business to continue. It's important to note that debt is not absolved in chapter 11.
The restructuring only changes the terms of the debt, and the firm must continue to pay it back through future earnings. If the person has any further questions they shouldn’t hesitate to ask. The issue of the partners, should not be a major issue, they all should decide on what to file as is best for their interests as well. If satisfied with our service please press the accept button so we can receive credit.
A person has a business line of credit guaranteed by a personal guarantee & a Family trust guarantee. If no Ucc-1 was filed can the line of credit be discharged in bankruptcy?A bankruptcy can discharge the personal liability for a loan, but cannot discharge the guarantee of a family trust. Bankruptcy Stat. 727(a) (1). This may happen even if the UCC-1 was never recorded. The whole point the UCC-1 was never recorded just means the lender does not have a security interest in the UCC-1 property.
If a person signs a personal guarantee on a construction loan for a company and the company runs out of money, can the bank come after that company for the loan if they did not sign the papers and the person did?Normally the person is guaranteed the business debt, so the worker will be treated like a cosigner, if the business doesn't pay. It means that the lender can then collect from that worker. It is arguable that there is not a valid contract, but the person would have to prove the offer wasn't accepted. The worker would need to rescind the offer if the bank had not made the loan final.
Having the right information about the personal guarantee law can help individuals deal with difficult situations and make the right decisions during a bankruptcy. Ask Experts about the personal guarantee laws, guarantor’s rights and other bankruptcy related topics.