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Business loan default due to personal bankruptcy

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Mbaralt

Junior Member
What is the name of your state (only U.S. law)? Ky. I will have to file personal bankruptcy due to a horrible divorce. Judge ordered me to pay half of a business loan taken out by an LLC that was a partnership with ex husband. He is pushing to payment of loan. Will the LLC protect me or hurt me in this and will it hurt ex. He retained all of business.
 


FlyingRon

Senior Member
What is the name of your state (only U.S. law)? Ky. I will have to file personal bankruptcy due to a horrible divorce. Judge ordered me to pay half of a business loan taken out by an LLC that was a partnership with ex husband. He is pushing to payment of loan. Will the LLC protect me or hurt me in this and will it hurt ex. He retained all of business.
If you have an order from a judge (I assume this is part of the property settlement at the divorce), the LLC is IRRELEVENT now. You have personal responsibility for that. It is also NOT dischargeable in your personal bankruptcy so if you think you can dodge your divorce orders by bankruptcy, you are mistaken.
 

Mbaralt

Junior Member
Bankruptcy

I hate that I'll have to file bankruptcy. I'm not trying to dodge anything. My ex lied to judge and claimed the business loan was personal and she bought it. I brought papers back to judge showing it was a loan taken out by our business in its tax I'd # with both our signatures. Judge said she already ruled and wouldn't look at proof it was business. Ex has dragged out divorce issues for more than 3 years. He appealed judges final orders, lost and then brought it to ky Supreme Court. He emptied our bank accounts, nearly emptied our retirement and his constant lies have led to $50k in lawyer fees in addition to another 80k of debt. He got house, business and won't divide marital property or return personal. This has been a nightmare. I can't afford basics. I have 3 kids and has paid child support but nothing else. 26 yrs of marriage. I'm drowning because of his actions. My accountant advised bankruptcy but because the business loan was under business tax if I didn't know how it would be effected. I need help not snarky attitude.
 
You need to discuss your situation with a bk attny.

In a Chapter 7, obligations that arise out of a divorce decree are not dischargeable as provided by either 11 USC 523(a)(5) which is for domestic support obligations (DSO)or 11 USC 523(a)(15) which covers non DSO obligations.

In a Chapter 13 obligations that arise out of a divorce decree that "are not in the nature of support" under 523(a)(5), meaning they fall under 523(a)(15), are dischargeable. However, how your divorce decree reads is not necessarily how the bk court judge will interpret it. The bk judge has the independent right to determine if a particular obligation is "in the nature of support" and if he/she so determines, the obligation will not be dischargeable in a Chapter 13.

Go find a good bk attny.

Des.
 

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