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My Husband Has an LLC That Might Be Going Under. – Katie

“Dear Steve,

My husband has a LLC that has lines of credit with the bank and bills. To get the line of credit he had to guarantee the line personally. The business is not making it. I am not on the line of credit or any of his accounts. The business may be going under

There are two parts to the question – If the company goes under will he have to file personal or business bankruptcy? If he has to file personally – can he do it without effecting me or my credit?

Katie”

The Answer

 

Dear Katie,

Well you might be impacted, but indirectly.

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If he has to go personally bankrupt and you have any joint credit accounts it will be noted on your credit report that the account was included in bankruptcy.

If you have any joint assets, like a home with equity, then that might a bit of an issue as well.

What I would suggest is that you and your husband make an appointment with a local bankruptcy attorney now and go in and ask all the questions to plan for what may happen. It is better to be informed and prepared that wondering and worrying.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Lisa

    Steve, i have an llc in pa (i live in nj), that is going under quick. we are behind in the rent and were served today and notified we are being sued for back rent and rent on the whole lease (well over $1000,000). i do not see anywhere in the lease that i signed a persoanl guarantee. the suit lists my llc’s name as defendent. the lease reads the llc as the tenant with the members signatures at the end. i do not see a personal guarantee anywhere. i can not afford a lawyer!! i am beyond broke. i own half of my house in nj, my partner owns nothing. am i legally responsible to pay the rent?

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