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If my company files Chapter 7 bankruptcy can I discharge a corporate loan that I personally guaranteed?

Asked over 2 years ago - Dallas, TX

I have a LLC that has a line of credit with a bank that my wife and I personally guaranteed. While we have the ability to pay it off over time, the bank just called our note and now wants me to make the $175K payment in four months. I cannot do that. In 36 months, I can but not in four.

My business is a service consulting business with no real assets. I can easily restart it. If I file Chapter 7 on the business will the Line of Credit be discharged or will I still owe it personally?

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Attorney answers (1)

Andrew Daniel Myers

Reputation Level 20

Answered over 2 years ago. Personal Injury Lawyer in North Andover, MA.

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Your LLC and you, personally are two different entities.

If you filed a bankruptcy for the LLC, that would have nothing at all to do with the fact that you signed a personal guarantee.

See a business lawyer with bankruptcy experience. The better course of action would be to look at whether you are eligible for a Chapter 7 bankruptcy. If so, then consider a personal bankruptcy to discharge the personal debt and a winding down of the LLC.

This answer is provided for informational purposes only. Actual legal advice can only be provided in an office consultation by an attorney licensed in your jurisdiction, with experience in the area of law in which your concern lies.

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