August 8th, 2012 by Questions

I received a “Small Business Loan” to purchase machinery for a startup company I set up a couple of years ago. I was required to sign a “personal guarantee” for 25%. (unsecured)
I have not been able to get the business off the ground and have been personally funding it for the past two years.
Cannot afford to do it any longer so I’m going to have to consider bankrupting the company.
I don’t have an income to be able to pay out the personal guarantee so what can I do?

Posted from: Ontario


One Response to “Mannorock”

, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:

What you might find is that if you are unable to pay the 25% you have personally guaranteed you may need to file for bankruptcy personally. However, be careful as you may find that is sufficient to simply walk away from the company and file for personal bankruptcy. Often this is sufficient and if so there is no point you paying for both the corporation to file and for you to file. However, to know for sure what you really need to do is to contact a local trustee to discuss what is the best way to proceed.

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