This question came in on AVVO.com, and is important. I see many business owners struggling with the same types of problems. You can see that the details are complicated, and this person definitely needs legal help to untangle it. I rephrased it for the Headline, but the full question is below:

Signed bank-loan guarantee for startup. Got laid off from LLC . Business closed and didn’t pay loans. Should I file bankruptcy? I was 10% partner on LLC startup eatery. To pay construction, my 40% partner got $450K on bank-loans which I had to co-sign as additional guarantor. He also took $350K individual loan w/ his wife as 2nd-mortgage, I didn’t have to cosign this one. After 2yrs working there, I got laid-off by majority members (40%partner and his family investors). I asked the bank and partners but nobody released my guarantee from loan papers, they kept renewing the loan principal every year, paying interest-only. Recently the restaurant closed its doors. The 40% partner and his wife filled for Chapter-7. I don’t have money / assets to pay loans. Will the bank come after me? Should I file bankruptcy? I’m married, my wife didn’t get involved, but she’s afraid it can affect our home-mortgage.

My answer:
. It is important that you consult with an experienced bankruptcy attorney. I see many people who have invested in a business, and guaranteed loans, only to see the business fail.

Yes, it is very likely that you can be sued by the bank. And, you need to discuss your financial situation with an attorney as soon as possible. It is possible that your home could be at risk as well. You need to discuss the consequences of bankruptcy, whether it is the right solution, and whether you qualify.

Most bankruptcy attorneys offer free consultations, as I do.

Daniel J. Winter
BankruptcyLawChicago.com
djw@DWinterLaw.com
312-789-9999
Offices in Chicago, Gurnee, Oak Lawn, and Skokie, Illinois