| 1. |
|
| 2. |
|
| 3. |
|
Ratings. Guidance. The Right Lawyer.
Could my personal assets be taken if I file for bankruptcy protection for my small business
Memphis, TN
Viewed 584 times.
Posted 11 months ago in Bankruptcy / Debt
Flag as objectionable
Small Business Bankruptcy Secured Loan:
Small Business Bankruptcy...I'm a small business owner. My community bank gave me a secured commercial loan, based upon the equity in my home. This loan is obviously in 2nd position. If my business files bankruptcy, how would this loan be handled? Can the bank then try and foreclose in my personal residence to recover their money?
Answers (1)
Michael Duane Cross Jr.
This attorney is licensed in Georgia and 1 other state.
Posted 11 months ago.
Flag as objectionable
The community bank will have the option to foreclose on the house, but it would take the house subject to the already existing first mortgage. Most likely, upon learning of the community bank's intent to foreclse, the mortgage lender would begin foreclosure proceedings also. This ultimately would result in a foreclosure sale by auction. At the auction, the mortgage lender would likely "bid" an amount equal to the amount owed on the first mortgage. If no one else bids, then the mortgage lender will become the owner of the house, the community bank's lien against the house will end, and you will no longer owe anything to the mortgage lender.
You would, however, still owe the community bank, and they may attempt to file a lawsuit against you if you personally guaranteed your business' loan. |
