Person owns a business. They take out a business loan in the business name but signs as the personal guarantor. The guarantor will be discharged from the their personal liability, but the entity/primary borrower will still owe the money. If the business is on-going then you need to look to the loan documents under events of default, as a BK by a guarantor could constitute a default under the loan agreement and accelerate the debt. Of course if the business is insolvent and shutting down, so what.
Can you bankrupt a personal guarantee
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My business declared bankruptcy in 2001, Chapter 11.$200,000++in debt. I had a personal garentee of $25,000.00 backed up with my home. I never was asked or received a notice to pay(over 10yrs). This serfaced when I went to refinance our home. The bank says I don’t owe the money but won’t release the 2nd mortgage. My question is WHY? Alabama