Legal Question in Bankruptcy in Massachusetts

Personal Guarantee

I made a loan to two people residing in Boston, Mass. The loan was to help their ailing company. The loan was personally guaranteed by the two people. The loan has not been repaid and the business has since closed. Will I be able to collect on my unsecured note if the parties and/or the company declare bankruptcy? I have since filed a lawsuit to both parties and the company. What can I do in the meantime, to ensure that I get repaid? I don't know if the two parties plans to file for chapter 7 or 13.


Asked on 2/07/02, 1:59 pm

1 Answer from Attorneys
James Fiorentini Fiorentini Law Office

Re: Personal Guarantee

As a general rule, personal guarantees are enforceable, even if the corporation goes bankrupt. In fact, that is one of the primary reasons creditors seek personal guarantees. You want to be very careful, however, that you do not violate what is known as the "automatic stay" issued by a bankruptcy court. Examine all bankruptcy papers you receive carefully and have a lawyer look at them.

If we can assist you, we are happy to do so.

Fiorentini Law Office

www.FiorentiniLaw.com

1-800-834-6964

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Answered on 2/07/02, 2:05 pm


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