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Personal guarantee on business lease contract ?: I am the only income source in our family and my husband owns a restaurant. The business is going bad for many years and they want to close the business but the lease contract doesn't expire till Oct 2016. My husband and his partner have personal guarantee on the lease contract. Do I have any liability for my husbands personal guarantee? The house is on my name only and we have joint saving and checking accounts but as I mentioned I am the only income source for the family of 4.

Asked about 2 years ago in Bankruptcy

Benjamin’s answer: The technical answer is "no" you personally are not liable for the debt your husband guaranteed. However, Wisconsin is a marital property state, which generally speaking means that all of your property is available to pay a claim incurred by your husband. That means the party owed money on that restaurant lease could sue your husband and take a judgment against him, but isn't entitled to a money judgment against you. That said, if the leasing company gets a judgment against your husband for the unpaid balance due under the lease, the leasing company could still garnish 20% of your wages because your wages are marital property. Because you are not personally liable on the debt guaranteed by your husband, if your husband files a bankruptcy case, or if you get legally separated or divorced, the leasing company would be prohibited from attempting to collect the debt from your property.

Typically, when a restaurant fails, there are credit card debts that were run up in an effort to keep the business afloat and often sales and employee withholding taxes owed by the company on which the owners of the company can also be held liable. In addition to the lease, some of the restaurant suppliers may also have guaranties of their accounts from your husband. It is not uncommon for the owners of a restaurant to sign an application for a credit account with a food supplier without realizing or remembering that it included a personal guarantee of the owner.

In short, it may be that when you and your husband consider the big picture, a bankruptcy case may be the only way to clear the slate and avoid wage and bank account garnishments for years to come. You're doing the right thing at this point, though; ask lots of questions and get good answers. Then you'll be ready to make the right decision.

Answered about 2 years ago.

Did not reaffirm car loan in ch7 and now car is shot.. Can i "give it back" without reprocussions: i took out a car loan last year on and 2003 SUV. I've always paid on time. I filed bankruptcy, ch 7 in April and did not reaffirm the loan. I have however continued to make payments on time and owe about $6k yet. Today to my horror the transmission went out and i was told it would be several thousand dollars to replace. I cant afford that. As much as i dont want to, can i just send the keys to the loan company, stop making payments, and give back the car despite it now not working? Could i be sued for this? What will happen? Im in wisconsin

Asked over 2 years ago in Bankruptcy

Benjamin’s answer: The only thing I'd add to the other responses is that the loan company may refuse to take possession of the SUV (and probably will under the circumstances), leaving you with the problem of what to do with the vehicle. If it sits on the street it could accumulate parking fines for which you will be responsible and the loan company won't likely foot the bill to have the car towed to a junk yard. If you take the car the junk yard, the junk yard probably won't take the car (and won't give you the salvage value of the car) unless the loan company releases it's lien on the title. There is a way to demand the loan company release the lien on the vehicle in such situations, but you'd need the assistance of an attorney to accomplish that because it essentially involves threatening to sue the loan company for a violation of the discharge injunction unless they release their lien.

Answered over 2 years ago.

Do I Need a bankruptcy attorney.: I purchased 1/10 interest of 25 acres from my brother. their are 4 owners of Land, and he filed bankruptcy 18 months after sale.
The trustee Lawyer is filing against me to reverse the sale and force the sale of the 25 acres.
Can they force sale when owning 10%.

Asked over 2 years ago in Bankruptcy

Benjamin’s answer: The trustee can't do anything to that property without convincing the judge he's entitled to reverse the sale of 1/10th of the 25 acres to you (and presumably to other family members). If the trustee believes your brother sold you 1/10th of 25 acres for less than what a stranger would have paid your brother for that land, then it's possible that the trustee could have the sale to you (and maybe similar sales to others) reversed. Yes, you'll need an attorney to attempt to negotiate with the trustee and to defend you in the lawsuit the trustee has filed against you. You've only got 30 days from the date you were reserved with that summons and complaint to file an answer or the trustee can obtain a 'default judgment' against you without a fight. Call a good bankruptcy lawyer quickly.

Answered over 2 years ago.