Legal Question in Credit and Debt Law in New York

Long story... My husband and I have good credit. He was 24% owner of a Sub-S Corp and Secretary of a Family-run business. Business was struggling. He was coerced/bullied (by his father and his brother) into completing a credit application so that their primary supplier would continue to supply the business with parts and supplies. His brother's credit was lousy - and since his brother was the primary signer, the loan was declined. Fastforward 6 months his brother died. When he brother died, we found out that his brother had stolen well over $100,000 from the business. Additionally, the office manager forged my father-in-laws signature and my husband's signature on some checks. Her theft totals about $46,000. My husband and his father finally agree 4 months later that the business is unrecoverable. Business declares bankruptcy.....now because my husband signed a loan application, the supplier is saying that he guaranteed past debts....even though the loan was never finalized. We are now being sued for over $80,000. We have retained counsel and will be fighting this, but what can we do?


Asked on 7/22/09, 1:06 pm

1 Answer from Attorneys
Michael Markowitz Michael A. Markowitz, PC

The law concerning being personally held responsible for a business debt is very specific. You would have to read the exact language in the credit application to determine whether he may be held responsible.

My suggestion is to re-file the question and include the language in the credit application. With this language I would be in a better position to offer advice.

Mike.

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Answered on 7/27/09, 1:37 pm


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