Bankruptcy Law/chapter 7

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Expert: Mark J. Markus- California Bankruptcy Attorney - 10/24/2009


Question
I have a business that I'm trying to sell. If I cannot sell, I will need to do a chapter 7, which I have already qualified for. The question is, the bank has a lean on my home when I got the SBA loan. Can or will the bank or SBA go after me in a Chapter 7. I would be doing a chapter 7 for business and personal. Also, can there be a short sale with a business. The business does bring in money. My sales are about $150,000. My SBA loan is $125,000.

Answer
Is your "business" a corporation or partnership, or is it just you as a sole proprietorship?

You separate the "bank" from the SBA. Are those two different loans?

If the "business" defaults on the payment, then the SBA can go after you for the debt you owe on what I assume is a personal guarantee.  The lien on your home will remain after you file a personal chapter 7 case, so they will be able to be paid from any sale or refinance of that property (assuming there is equity).

As far as filing a chapter 7 for the business (and assuming it is a separate corporation), please visit http://www.bklaw.com/business_bankruptcy.html for more information on that option.  

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Mark J. Markus- California Bankruptcy Attorney

Expertise

Mark J. Markus is a Los Angeles bankruptcy attorney who has practiced exclusively bankruptcy law in California since 1991 and is rated A+ by the Better Business Bureau and is AV-rated by Martindale-Hubbell. He represents debtors, creditors, and Trustees in Chapter 7, Chapter 11, and Chapter 13 of the bankruptcy code throughout California.

Experience

Visit our California bankruptcy webpage at http://www.bklaw.com for more information on bankruptcy in general and Mark J. Markus in particular. Many questions are answered on the web page (hint, hint).
The Markus webpage also contains more information on

  • Which Chapter to File,
  • business bankruptcy,
  • chapter 7 bankruptcy,
  • chapter 11 bankruptcy,
  • chapter 13 bankruptcy,
  • Do You Need a Lawyer to File Bankruptcy?
  • Frequently Asked Bankruptcy Questions

    Also visit our Los Angeles bankruptcy blog for interesting articles and much more.



    Organizations
    Central District Consumer Bankruptcy Attorneys Association (CDCBAA) Los Angeles County Bar Association (LACBA) Commercial Law & Bankruptcy Section of the Los Angeles County Bar Association Financial Lawyers Conference (FLC) National Association of Consumer Bankruptcy Attorneys (NACBA) Los Angeles Bankruptcy Forum (LABF) American Bankruptcy Institute (ABI) San Fernando Valley Bar Association (SFVBA)

    Publications
    Central District Consumer Bankruptcy Attorneys Association Newsletter September 2007 (Vol. 1, Issue 2)

    Education/Credentials
    J.D., University of Arizona 1990. B.A. Economics, California State University, Northridge 1986. For more details please click here

    Awards and Honors
    AV Rated by Martindale-Hubbell (http://www.martindale.com) A+ Rated by Better Business Bureau

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