Legal Question in Bankruptcy in Pennsylvania

Chapter 11 Debtor as Guarantor to New Loan After Filing Chapter 11

Can a Individual who files for chapter 11 bankruptcy be a guarantor to a new debt (a loan of another) even though he is in chapter 11 bankruptcy?


Asked on 6/24/04, 9:37 am

1 Answer from Attorneys
Daniel Press Chung & Press, P.C.

Re: Chapter 11 Debtor as Guarantor to New Loan After Filing Chapter 11

An individual debtor could theoretically do it, but only if is crystal clear that the guaranty does not involve assets of the estate. That may still not be enough to satisfy the Court, and the debt may well end up not being enforceable or collectible. Why would a lender want such a guaranty?

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Answered on 6/24/04, 9:58 am


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