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Business Bankruptcy & Personal Guarantees

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impalaman

Junior Member
What is the name of your state (only U.S. law)? Illinois
I worked for a corporation for 25 years and 8 months ago me and another employee purchased it. We are the only two stockholders. We both took out a loan to cover the purchase with a personal guarantee. Since the economy went sour we are struggling to pay or vendors and are now behind on all vendors 60 to 90 days. We have laid off almost all employees to cut expenses. We are considering filing for bankruptcy and are wondering how the courts would handle the loan. Would they liquidate the assets to pay off the loan first and then if anything is left over pay off the vendors or would the bank force us to sell our houses to pay off the loan?

Nervous in Illinois!What is the name of your state (only U.S. law)?
 


HomeGuru

Senior Member
What is the name of your state (only U.S. law)? Illinois
I worked for a corporation for 25 years and 8 months ago me and another employee purchased it. We are the only two stockholders. We both took out a loan to cover the purchase with a personal guarantee. Since the economy went sour we are struggling to pay or vendors and are now behind on all vendors 60 to 90 days. We have laid off almost all employees to cut expenses. We are considering filing for bankruptcy and are wondering how the courts would handle the loan. Would they liquidate the assets to pay off the loan first and then if anything is left over pay off the vendors or would the bank force us to sell our houses to pay off the loan?

Nervous in Illinois!What is the name of your state (only U.S. law)?

**A: in BK the creditors including the bank would go after your personal guarantees if the Corporation filed BK.
 

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