Legal Question in Business Law in Virginia

Personal liability for company debt

My wife is half owner of a small ''S'' corporation. Her mother is the other half owner and has asked the courts to dissolve the corp. There is a credit card with an outstanding balance on it. The card is in my wife's name through the corp and her mother is trying to hang the debt on my wife. If the company is dissolved, is my wife responsible for the debt? Does my wife have a right to fight to keep the company?


Asked on 5/31/05, 5:06 am

1 Answer from Attorneys
Richard S. Stolker Uptown Law, LLC

Re: Personal liability for company debt

The answer to your question is in the credit card agreement that your wife signed. (She should be able to get a duplicate copy from the card issuer.) However, it is very likely that your wife guaranteed the credit card as an inducement for the issuer to open an account, and therefore she would be liable for any purchases using that card. If those purchases benefitted her mother, she may have the right to sue her mother for contribution of her share, but you would need to consult an attorney for a more definitive answer.

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Answered on 6/01/05, 5:32 am


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