0
If a personal guarantee can not be discharged through a business bankruptcy and no personal funds available to pay the debt what happens?
Wiki User
∙ 12y ago
If a business can't pay the debts its incurred, at least one popular option is for it to file a business bankruptcy. Basically, the owners can just go about their merry way afterward.
If a person can't pay the debts they've incurred, at least one popular option, is to declare personal bankruptcy.
The debt you address is both business and personal. (That's why they had you sign for it personally too). Hence, you may go about your merry way as the owner of the bankrupt Co, but that won't remove your personal obligation for the debt.
Generally speaking, your assets, (current and future), as well as your income (current and future) can and will be subject to seizure (termed garnishment when wages) to satisfy the debt they get a judgment for. Obviously, they can (and as it is their business, very good at) using all legal methods to enforce the right, or compel you to pay...(of which there are many).
Of course, they may just sell the right to collect to a third party, but the result is the same.
And while you may feel you simply don't have anything to take (or even a wage they can garnish)...a judgment stays in force for 20 years (and can easily be renewed)...so you better want to be poor, have nothing and be worth nothing for a verylong time! It isn't unheard of for some collection agency to find you have an outstanding judgment from years ago...now that they see you have something...(a car, a house, a lottery winning...anything) and get their fee by collecting it with all the back interest.
Y
Wiki User
∙ 12y ago
Add your answer:
Earn +20 pts
Does a personal bankruptcy eliminate a personal guaranty on business debt?
Yes. I filed for that reason alone. I signed a lease for a business. I was told I had to sign a personal guarantee. I had to file a personal BK because of it. When I left the lease they tried to sue the business....but the business had nothing, so they came after me because I signed a personal guarantee. I filed a Bankruptcy and it was discharged.
If you file business bankruptcy do you also file personal bankruptcy?
I suppose you could, but even if you did manage to get the financing together to open another business, any profits from it would be subject to seizure by the court and the bankruptcy trustee to pay off the bankruptcy judgement. There is no bankruptcy "judgment." If the bankruptcy is over and you have your discharge, you can open a business, and any money you make is yours. Providing the first bankuptcy is discharged.
Can a creditor file an adversarial claim in bankruptcy court in a personal 7 bankruptcy for something that they contend occurred during a business bankruptcy 2 years previous. No claim was filed then.?
No, a creditor is required to file a claim if seeking payment, otherwise that claim is considered waived. So in this case. if there was no claim, then it was waived and the debt discharged. But even if it was filed, it would have been discharged in the business BK.
How do you know when your chapter 13 bankruptcy is over?
You will receive a letter that your bankruptcy is discharged. You can also call the bankruptcy court or the trustee and find out if it is final.
Can you settle a charge off with the finance company?
yes Whether a debt is "charged off" or even discharged by a bankruptcy court, the debtor has the option of repaying the debt anyway. This is how many business reorganize their finances. The file for bankruptcy, have debt discharged but negotiate with the creditors after the bankruptcy to pay down the amount(s). That way the company can stay in business and also keep it's credit rating up.
If you file Bankruptcy on your business can they take your personal assets?
Only if then can show that you committed fraud, by piercing the corporate veil (i.e. using the business as your personal property), or if you gave a personal guarantee for business loans/debts.
Is there a way to get off chex systems if you had a business checking acct and the business filed bankruptcy and the amount they are showing are bank fees that were included and discharged?
No. Valid information reported to CS will remain for the required 5 year time limit.
What information is available about business bankruptcy?
Unfortunately, many small businesses are struggling financially in the current economy. To find information on business bankruptcy, you have a variety of options, including contacting an attorney, contacting a financial advisor, or seeking information about local and federal bankruptcy laws in your area.
Is there a bankruptcy for business?
Yes, normally I believe ch. 11 is for business bankruptcy.
What kind of services do business bankruptcy lawyers offer?
A business bankruptcy lawyer can guide your business through the bankruptcy process, and ensure that you can maintain as much of your assets as possible while undergoing the bankruptcy process.
Guarantee in terms of business finance?
Guarantee in terms of business finance
Can you own your own business while going through bankruptcy?
Depends on the type of bankruptcy you are filing. Generally a personal bankruptcy does not effect your business, and vise versa. However, if your business is filing bankruptcy, a Chapter 11 reorganization will allow you to stay in business.
