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4 Replies Last post: Feb 21, 2009 10:16 AM by bmt2008

Line of Credit Guarantee

Feb 18, 2009 5:15 PM

tomjensen 1 posts since
Feb 18, 2009

Hello,
I was part of a business and helped open a line of credit as a guarantor. I have been forced out of the partnership and have no control over the buisness anymore. When I came out, my buisness partner signed an agreement that he will take over the line of credit. But since then he has not paid the loan off nor he is answering my emails and calls. I have talked to several loan officers with Bank of america but no one seems to give me any definitive answers. What are the steps I should take to make the business and the current buisness owner pay the line of credit? The line of credit was directly transferred to the buisness and it was used by the buisness exclusively. Any advise would be appreciated.

Thanks
Tom J

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BizinSoCal 14 posts since
Feb 19, 2009

1. Re: Line of Credit Guarantee Feb 19, 2009 4:41 PM

Tom,

If the line of credit was transferred to the business (i.e. an LLC or a Corporation), then it should not affect you personally. Also, if the current owner signed an agreement that he will take over the line of credit, then he should be liable for it. Question to you is: are you encountering issues stemming from the line of credit?

Reigneer

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netnextday 11 posts since
Feb 13, 2009

2. Re: Line of Credit Guarantee Feb 19, 2009 5:31 PM

Did your partner sign an agreement with you that he would take over the line of credit or did he actually sign papers at the bank? Were you released BY THE BANK from your personal guarantee with them? If they did not re-write the Note in the partner's name only ......you would still be liable for the guarantee if he is not paying. Signing papers amongst yourselves is a civil matter.....similar to a divorce. Unless the bank actually releases your responsibility....you are still on the hook. I would seek legal counsel that would force them into re-writing the Note. Unfortunately, if their credit is not there in order to qualify without you or the bank is not willing to do so....it could get very sticky. Definitely ask your lawyer about a "next step". Good Luck!

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Itslikethis 4 posts since
Nov 14, 2008

3. Re: Line of Credit Guarantee Feb 20, 2009 8:28 PM

When you are picking out an attorney make sure you have one that has experience in business litigation. Hopefully you wont need to litigate. But should that happen you want someone who understands the appropriate laws regarding THIS issue. Also it never hurts to have someone known in the community for winning. I've spent the last eight years working with attorneys - trust me get the right attorney and you may avoid a law suit with quick resolution. Hope it turns out well for you. J

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bmt2008 305 posts since
Jul 30, 2008

4. Re: Line of Credit Guarantee Feb 21, 2009 10:16 AM

Tom,

Find a good lawyer.

Business Money Today
www.businessmoneytoday.com

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This Question is Possibly Answered

Line of Credit Guarantee

Feb 18, 2009 5:15 PM

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