Legal Question in Business Law in Arizona

You are correct that the spouses might be liable in the event of default of the loans. The actual exposure would, of course, depend on the actual language in the loan documents.

In Arizona lenders often require spouses to sign off on the loans in part to bind the community property. The risk is being taken by the marital community so both spouses are exposed. If the business is successful, the martial community of the spouses benefit or are compensated in theory through income and other profits the spouse receives from the business.

Greg Poulos

Disclaimer: This answer does not create an attorney-client relationship and is for informational purposes only. It is not, nor is it intended to be, legal advice and you should not rely upon it. You should consult an attorney for legal advice addressed to your individual situation

You might be able to get compensation, but the compensation would not be exempt from the same risk that something happening to the company poses, right? And Poulos is right, you are getting some compensation by sharing in the profits of the business and what the profits buy, right? Personal guarantees on the loans, if this is what you are referring to, can take many forms. We would have to review the paperwork involved to determine what your exposure is, and what, if anything, you can do about it.