Expert: Terry Leeders - 4/18/2008

Question
My partner and I created an LLC in 2006. We took out 4 credit cards and two loans, one against his home. Well, he is not doing well as our business has not taken off. I feel terrible as everything credit wise is in his name and he is being hounded. It has reached the point where I need to do something to protect him while I bring in more capital. Is there anything I can do legally? Thank You

Answer
Tough call.  Since he signed personal guarantees and put lien on his home, the creditors can pursue him personally as well as the business.  Unless the debt is paid off, they can collect from him.  Chapter 11 could be an option, but whatever the company doesn't pay, he's still on the hook for.  So, you may want to work with SBA to see what refinance options may be available.