Is bankruptcy my best option? 9 Answers as of February 12, 2011

My husband is one of three partners that built a home as a business deal. All three signed a personal guarantee on the loan. One partner has since filed personal bankruptcy removing herself from any remaining obligation. The home sold, but there is an outstanding balance due. If my husband has to file bankruptcy due to the LLC, do we both have to file bankruptcy? I did not sign the personal guarantee - I am not involved in the LLC at all. The LLC is now bankrupt and dissolved. Are there any other options we could look at for a resolution? We are trying very hard not to go the bankruptcy route, but feel it may be our only option. We are trying to save at least one of our good standing credit scores. Any advice you can provide would be greatly appreciated!

Ask a Local Attorney. 100% Anonymous. Free Answers.

Free Case Evaluation by a Local Lawyer: Click here
Ursula G. Barrios Law
Ursula G. Barrios Law | Guillermo Machado
If you personally guaranteed the debt (and the loan is a recourse loan), then the creditor can attempt to collect against you unless you make arrangements with the creditor or file for BK.
Answer Applies to: California
Replied: 1/27/2011
Greifendorff Law Offices, PC
Greifendorff Law Offices, PC | Christine Wilton
Your options are to settle the debt outside bankruptcy and potentially pay income taxes on the canceled portion of the debt after paying this creditor to settle; or file personal bankruptcy. Married spouses generally do not have to file joint bankruptcy, however, all marital income, expenses and debts must be disclosed on any personal bankruptcy papers.
Answer Applies to: California
Replied: 1/27/2011
Uriarte & Wood, Attorneys at Law
Uriarte & Wood, Attorneys at Law | Robert G. Uriarte
You raise a number of issues that are best addressed in a face to face consult. The one guarantor filing increases the exposure to your husband and there are a number of factors to be considered before you make the decision to file.
Answer Applies to: California
Replied: 1/27/2011
Bankruptcy Law Center
Bankruptcy Law Center | Bill Zurinskas
I don't know if bankruptcy is your best option. I need more information. As long as you are not liable on your husband's LLC obligation, then you do not have to file bankruptcy with your husband, assuming you do not have any other reason to file bankruptcy. Your husband's non-bankruptcy options include 1) debt settlement (beware of debt settlement firms - they don't usually work)(hire an attorney), 2) Debt Management Plan through CCCS type firms. Give me a call for free 5 min. tel. consultation. Please refer to this email.
Answer Applies to: Colorado
Replied: 1/27/2011
David R. Fondren, Attorney at Law
David R. Fondren, Attorney at Law | David R. Fondren
A spouse is not required to file a bankruptcy with the other spouse. Whether you want to or not is determined more by what you owe or co-owe with your spouse or other people and also by what property you own or co-own. You need to sit down with a bankruptcy attorney. They need to get a financial picture of you and your spouse and go over all of your options, inside and outside of bankruptcy. Then you can make an informed decision as to what is your best path.
Answer Applies to: Missouri
Replied: 1/27/2011
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    It would be impossible for any attorney to respond to your questions with any degree of accuracy. You and your husband need a personal consultation with an experience bankruptcy attorney to discuss your very complex questions and legal issue that require a lot more information that you ever possibly provide in a forum like this which is for simple bankruptcy questions and not to resolve entire bankruptcy cases, particularly cases involving a business, LLCs, personal guarantees, etc. You have a very complex bankruptcy case and need to obtain the services of a very experienced attorney to answer your questions. You should not rely on any attorney who is willing to answer such complex questions online with so little information.
    Answer Applies to: California
    Replied: 1/26/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    You do not necessarily have to file with your husband. Because of the LLC he needs to see a lawyer, this should not be done without one. And, if you do wind op filing with him, bankruptcy is not the end of the world. The sign on my door reads, "Bankruptcy is not a bad word." Contact (National Association of Consumer Bankruptcy Attorneys) to find one near you.
    Answer Applies to: California
    Replied: 1/26/2011
    The Law Office of Mark J. Markus
    The Law Office of Mark J. Markus | Mark Markus
    A husband and wife never have to file bankruptcy together. They can, or they can file separately, just one of them, or none of them. The issue isn't whether you "have to file with him", the issue is whether your obligation will be discharged and to what extent it will affect your credit. The credit question is not a bankruptcy question, so I will defer on that except to say that if the debt isn't in your name, the bankruptcy of your husband shouldn't affect your personal credit rating too much. However, if you live in a community property state such as California, and have community debts, and those debts aren't paid, it may affect your credit regardless of whether you file the bankruptcy or not.
    Answer Applies to: California
    Replied: 1/26/2011
    DiManna Law Office, LLC.
    DiManna Law Office, LLC. | Dawn DiManna
    You would not have to file bankruptcy if you are not on the loan. It might be possible to try and negotiate a very reduced payment since it is unsecured. You should consult with a bankruptcy attorney who can lay out all your options for you.
    Answer Applies to: New Hampshire
    Replied: 1/26/2011
Click to View More Answers: