Personally guaranteed business debt

[Oh No]

I've been lurking on this great site for a while now and I have a few questions.

My wife and I have no cc debt at all or any personal debt that we cannot handle. The problem is personally guaranteed business debt by me that totals about 120K that will be going to trial pretty soon. I was told that if I file by myself her credit won't be hurt as nothing that we jointly own will be foreclosed/repod. We make about 120K combined and we have 2 babies. We live in Nebraska. Any of you have experience filing with only personally guarantted business debt that is bad?

Thanks

[HHM]

The median family income in Nebraska for a family of 4 is $64,800, so you are well above that level and therefore will most likely not be able to file for a chapter 7 bk.

What is the business debt for exactly? Is it simply defaults on business credit cards and lines of credit, or is it something else?

Personally guaranteed business debt has no special status or lower status than any other debt you are liable for personally (i.e. credit cards etc.). So, you are liable on the debt (once the business, or original debtor, defaults) just as you are liable for any other debt you have, mortgage, car payments, etc. Thus, the debt is treated like any other debt in a BK. However, since it is business debt and not consumer debt, there are some different rules that apply (not so much for the BK, but more so on the duties of the creditors mitigate damages and so forth). Also, are their any business assets left to satisfy the judgment, are you indemnified by someone else for any damages you may suffer in respect to the personal guarantee.

If the debt is going to trial, you might as well wait to find out what the final judgment will be, then at least it will be a liquidated claim. However, the risk with waiting is that the creditors could move quickly to execute, i.e. garnish YOUR wages, etc.

You should talk to a couple of BK attorney's in your area, Consultations are typically free, and find out what your options are.

[Oh No]

The median family income in Nebraska for a family of 4 is $64,800, so you are well above that level and therefore will most likely not be able to file for a chapter 7 bk.

What is the business debt for exactly? Is it simply defaults on business credit cards and lines of credit, or is it something else?

Personally guaranteed business debt has no special status or lower status than any other debt you are liable for personally (i.e. credit cards etc.). So, you are liable on the debt (once the business, or original debtor, defaults) just as you are liable for any other debt you have, mortgage, car payments, etc. Thus, the debt is treated like any other debt in a BK. However, since it is business debt and not consumer debt, there are some different rules that apply (not so much for the BK, but more so on the duties of the creditors mitigate damages and so forth). Also, are their any business assets left to satisfy the judgment, are you indemnified by someone else for any damages you may suffer in respect to the personal guarantee.

If the debt is going to trial, you might as well wait to find out what the final judgment will be, then at least it will be a liquidated claim. However, the risk with waiting is that the creditors could move quickly to execute, i.e. garnish YOUR wages, etc.

You should talk to a couple of BK attorney's in your area, Consultations are typically free, and find out what your options are.

No credit cards, it's a building supply company. The company with myself as the personal guarantee owes them 80K and our law firm about 40K+ to fight a mold law suit. We sold off all of the assets for the company fighting the law suit. We won the suit, but it ruined us as a company due to all of the legal debt and the 80K was mostly for repairs on the home in question.

[Brendon]

I would check with a bk lawyer, but with my case which was similar in amounts to yours with business debt being around 100k and very low personal debt, my lawyer filed for ch 7. Our income from my new job is around 110k, but because the ratio of personal debt vs business debt (business being the majority) was one of the reasons we were able to file under a 7. I live in Texas, and again don't take what I say as the the law, but it is what my lawyer advised.

[kondi]

Large secured business debt

I have 625K in secured debt as an SBA loan. My business failed due to fraud and gross inflation of revenues by the person I bought it from. The bank is entering a judgement against me next week for 625K. I have two other small business loans which I have been paying from personal account but cannot anymore. No consumer debt. There is no equity in my home since its market value dropped. My current job just covers my mortgage and other living expenses and nothing to spare. I have a lawsuit against the person who defrauded me, it is one year old and the findings are favorable to me; however it will take another year to go to trial, no settlement in horizon and I ran out of money to pay for it. What is my best option???
Thank you

[PoorGrammyinBK7]

Personal guarantee - business

This is much like our situation. Our problem is a judgment from a lease guaranty. We have very little CC debt and could have handled it. Going to see a lawyer tomorrow about a BK 7

[CindyLou]

I thought if you had primarily business debt then you could be over the median and do not have to take the means test......or is it that you just dont have to take the means test???? Ok, now I'm confused!