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A company considering Bankruptcy. How will it effect our finances and personal credit?
Atlanta, GA
Viewed 67 times.
Posted 11 months ago in Bankruptcy / Debt
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I have a small business that I started with my business partner two years ago. It is an S-Corporation. We opened up a line of credit and credit cards under our company name with our ourselves being the guarantors of that debt with our property. My business partner quit earlier this year and I am now the sole owner of the company. However, my partner's name is still listed as being a guarantor of the debts. If I decide to file the company for bankruptcy, what kind of effect will it have on us financially and to our personal credit? I would appreciate any advice. Thank you.
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Answers (1)
Joycelyn R. Curry
This attorney is licensed in Georgia.
Posted 4 months ago.
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The answer really depends on whether you file a Chapter 11 or Chapter 7 bankruptcy. Under Chapter 11, you have the opportunity to renegotiate the debts of the corporation while continuing to operate the business as a going concern. Under Chapter 7, you are liquidating the assets of the corporation.
The fact that your partner quit does not release him of his obligations under the personal guarantee. This is why his name remains on the documents. By definition, you and your partner agreed to be personally liable for the debts of the corporation via the guarantee. The effects on this will vary depending on which type of bankruptcy you are considering. You should contact an attorney for a consultation to help determine your options. I practice in the area of bankruptcy, though no regarding Chapter 11 bankruptcies. If you are considering a Chapter 7, do not hesitate to give my office a call. 678-954-5677 |
