Legal Question in Credit and Debt Law in California
Loan Not Paid Back From Company
My mom gave my friend and his partner a $10,000 loan because they were trying get a company going. I was working for them at the time as an employee. I wrote out a brief contract stating the loan for the company had to be paid back in one year without interest. They, my mom, and I all signed it. The company failed and did not make enough money. Who is now responsible to pay the loan? Am I responsible too since I signed it, even though the contract states that it is the companies responsibility?
2 Answers from Attorneys
Re: Loan Not Paid Back From Company
It depends. Was the company a corporation, a partnership or a sole proprietorship? Did the "friend and his partner" personally guaranty the obligation, or did they simply sign on behalf of the company? Did you personally guaranty the loan?
If the company was a sole proprietorship, then your friend and his partner would still be on the hook.
Re: Loan Not Paid Back From Company
You borrowed $10,000 from your Mom, and you signed for it. Mom obviously believed you were a partner in the company, or why would she? I don't believe your story about you being an employee. It is nothing but an attempt on your part to weasel out of paying back your Mom.
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