Legal Question in Credit and Debt Law in California

Corp. note personally secured

I had a corporation that is no longer active. The bank issued a line of credit to the corporation that was personally secured by myself and then business partner personal residences. My partner assumed all corporate debt when I decided to leave the corpoation that was our deal. The bank would not subordinate their popsition on my home with my persoanl guarentee which I understand. All was well last year and half but now I recieve a court summons for me to apper in two weeks the note is in serious default. Come to find out my X-partner house is encoumbered to the max and they are comming after me. I have about 125,000 equity and that is about what is owed on the note. What can I do in the situation? What legal recourse does the bank have on a note to a corp and what do you see as a likley outcome? Is there anything I can do to prevent my equity from being tapped? The X-partner has no assests and they are comming at me.


Asked on 2/20/07, 1:53 am

1 Answer from Attorneys
Jonathan Stein Law Offices of Jonathan G. Stein

Re: Corp. note personally secured

If you personally secured the loan, they can come after you. You could file a lawsuit against your former partner for half of the amount. If you have a "deal" with him, I hope you have it in writing. If you do, you can cross-complain against him for the full amount of the debt. However, if he has no assets, they are going to come after you and make it your problem.

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Answered on 2/23/07, 10:38 pm


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