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My business loan has a personal guarantee. Do I file for bankruptcy for myself and for the business as well?

New Milford, NJ |

I possess a small business in NJ and sales have significantly decressed. As a result, I am unable to pay back my creditors and will have to file for bankruptcy. My business loans have a personal guarantee and I am wondering if I will have to file for bankruptcy for myself and the business. Also, I would like to know if this will affect my wife.

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Attorney answers 1


If you want to be personally releived of the obligation on the guarantee, you must personally file for bankruptcy and obtain a discharge. Whether you file for the business is more complicated. If the business is operated as a corporation, it will not receive a discharge even in bankruptcy, but it will be able to conduct an orderly liquidation of its assets. A personal bankruptcy will have an effect on your wife, but you need to consult with a local bankruptcy lawyer for a fuller explanation as there are a number of variables.