If my partner and I file bankruptcy on our LLC, but we personally guaranteed real estate loans in LLC, what is personal impact?

Thre is no way to predict what a bank will do, but they could sue you personally and then go after your assets, including your home, and your income.

When you personally guarantee something, you are warranting to pay in the even that the beneficiary is unable to pay as agreed. Therefore if you file for bankruptcy with the LLC, the banks will look to you personally for payment of these debts. Keep in mind that they would have to sue you and win before they could attach a lien to your home or go after any personal assets.

Whether the bank will seek to enforce the personal guarantee is an independent cost-benefit analysis performed by the bank. The important thing to remember is that, irrespective of whether the bank comes after you, they have the option to do so. No one wants to have this cloud hanging over his or her head for years while wondering what the bank may do.

I frequently assist people and corporations in matters dealing with personal guarantees because of the economic climate we are all facing. Hopefully, the bank made a few errors in their personal guarantee that will give you a viable defense to any potential action.

Feel free to contact me at 404-518-6668 or yasha@heidariplank.com to explore your potential defenses, and to discuss best business practices to avoid any potential action.

DISCLAIMER: Although I am an attorney, absent a signed retention and engagement letter, I am not your attorney. There are no exceptions to this rule. Moreover, you shall not rely on the information I am providing you, as it is only for your general knowledge and educational purposes. Indeed, my analysis is always based on the laws of Georgia, and your jurisdiction might have substantially different laws and requirements. As such, you should always contact an attorney that practices in your local area.