Skip to main content

What happens if I don't pay personal guaranteed business loan and credit cards?

Los Angeles, CA |

What can they legally do to me if I have stopped paying the loan and credit cards?

I have an outstanding line of credit of $30k and a credit card of $3k with Wells Fargo, then another $5k credit card with Bank of America. I stopped paying them about 5-6 months ago, I believe the accounts have recently been charged off. I am the personal guarantor for these debts. I've been getting a lot of phone calls every day, but I just ignore them.

The business I have been running is not doing good. I’ve lost too much money and it's impossible for me to pay for those debts now. I am still running the business, but it's only making enough to support my own wages and expenses.

I keep only enough money in the checking account to pay my bills, and I have no house or assets beside 2 cars that I'm still paying for.

Thanks a lot for the fast answers, by the way, this is in Los Angeles County, CA.

Attorney Answers 3


Expect to be sued on the $30,000 debt in a few months to a year. For the other two, you may be hearing from lawyers in the next couple of years, if not sooner.

I have defended individuals being sued on commercial loan guarantees. If you are not able to pay the debts and are worried about being sued, you may want to try to settle the debt, either before they sue you or when you receive the lawsuit. Please review my legal guide, linked below, on settling a collection lawsuit yourself, with useful do's and don'ts.

If you are sued, you should have a lawyer represent you in the case. Otherwise, they are most likely to get a judgment against you for the full balance, since you are not likely to know how to handle the paperwork and assert your rights. If they have a judgment, they can garnish your wages. They can also get orders to have anyone paying your company money, pay them instead until the full judgment is paid, including interest, courts costs, and their attorney's fees. A lawyer can help you resolve this more favorably, perhaps get the case dismissed.

Mark as helpful

1 lawyer agrees


Eventually your creditors will file a civil lawsuit against you and they will most likely get a judgment against you. They can then take that judgment and try and collect it by attaching property, bank accounts, wages, etc..

Seems like it is time to consult a bankruptcy attorney for a free consultation so you can deal with your situation now. Don't let it get worse.

Feel free to email me directly if you have any further questions or would like a free legal consultation.

Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.

Mark as helpful

1 lawyer agrees


The key here is personal guarantee. They can sue you. The first thing you need to do if and when you get sued is file an Answer. The summons will tell you that you must “appear” by way of an Answer in 10, 20 or 30 days, “depending on the method of service.”

PLEASE check the law in your state as you may actually have to appear in court, as in Virginia, in order to avoid a default!

You need a lawyer. But, if you cannot afford one right away, rather then do nothing and have a judgment entered against you, you can “appear” by filing something!

Many people think this means they have to go to Court and this is incorrect. 90% of all lawsuits end in Default Judgments because the defendant (person getting sued) did not file an Answer.

I recommend you go to the free form I have on my website. Print it out and fill it out as instructed. You must answer the numbered paragraphs on the Complaint by writing them into the appropriate lines in the Answer. The Answer will allow you to preserve your rights and will prohibit a default judgment (i.e. you did not show up) from being entered against you.

Mimic the paperwork you got when you got sued. Answer all the paragraphs of the Complaint by writing the numbers in lines 1, 2 or 3.

Almost 100% of attorneys will deny what is owed because they did not do the calculations and do not know what the basis for the number is…

When you file the Answer that is your “not guilty”. You have the right to make the person suing you (Plaintiff) prove their case, but you must also answer the complaint truthfully.

Make sure you fill in the name and address of the attorney suing you before you bring this paperwork to the Court. Mail it to the attorney suing you right away!

Check out the guide I have drafted on the Avvo profile. This will provide more detailed instructions. If it is helpful remember to indicate that and get the guide read!

Good Luck!

Disclaimer: This answer does not constitute legal advice. I am admitted in the States of New York, New Jersey and Massachusetts only and make no attempt to opine on matters of law that are not relevant to those three States. This advice is based on general principles of law that may or may not relate to your specific situation. Facts and laws change and these possible changes will affect the advice provided here. Consult an attorney in your locale before you act on any of this advice. You should not rely on this advice alone and nothing in these communications creates an attorney client relationship. The opinions expressed herein are those of the author only and the fact that he has worked as an Assistant District Attorney; State Supreme Court Clerk; Special Assistant United States Attorney (Hawaii); Assistant Cornell University Counsel or Judge Advocate, United States Marine Corps should not be relied upon to assume that these statements reflect the policy of these organizations.

Mark as helpful

1 found this helpful

1 lawyer agrees

Bankruptcy and debt topics

Recommended articles about Bankruptcy and debt

What others are asking

Can't find what you're looking for?

Post a free question on our public forum.

Ask a Question

- or -

Search for lawyers by reviews and ratings.

Find a Lawyer

Browse all legal topics