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Generalizations

Partners are generally liable for all the debts and obligations of the business. This means that, absent an agreement, debts are shared like profits are shared in the business - usually, divided equally among the partners (unless they agreed otherwise). When a partnership starts to fail, or accumulate too much debt, every partner is individually liable for all the debts created. If the business assets are sold to pay off these debts but there are still debts left over, the creditors may go after each debtor personally. Since this is often an overwhelming amount for an individual to absorb, the necessary result may be the filing of a petition for bankruptcy. A partner

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Stephen M. Trezza

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