Business owners normally form corporations, LLC’s, and other business entities in order to protect their personal assets. As time goes on the business entity will often times enter into various financial transactions including different types of loans. When the business shuts down or the loan goes into default many business owners are surprised to find out that the business loans are now attacking their personal credit report. What went wrong?
Many business loans come with something called a personal guarantee. This means that even if the loan is in the name of a corporation or limited liability company, if the business defaults on the loan, the business owner, who is usually the guarantor will be held personally liable.
In a situation like this, the business owner can be sued and a default judgment can be attained in many cases. Many business owners do not realize that a judgment has been entered against him for a business that until it appears on the credit report or their bank account has been frozen.
When something like this happens the business owner must hire an attorney who can follow the necessary paperwork to request that the court vacate the judgment.
If you or someone you know is dealing with a judgment or lawsuits stemming from a business loan feel free to contact the law office of Abel L Pierre today. One of our experienced attorneys will be pleased to speak with you in order to create an effective solution to the problem.