Question Really struggling : Bankruptcy or Foreclosure? Which one is worst?

[Achilles07]

Hi everyone, new on this forum. i want to have an educated (somewhat) questions for lawyer when I have to see him.

My situation: I own a yellow cab NYC Taxi Medallion. Bought it with a bank loan close to $835k about 2.5 years ago. Thanks to Uber and TLC, the medallion market went to shit and lost most of its value. As of today it is probably worth close to $250k, maybe even less. Business is bad and not enough to pay for the loan. The outstanding debt is $720k. Unfortunately this was set up as a corporation and I signed as a guarantor.

If the corporation declares bankruptcy, I will most likely have to declare personal bankruptcy as well. Correct?

which bankruptcy is better? is foreclosure a better option? If i have any credit cards, can I keep them? I do not want to keep this medallion. But either way my credit will be ruined. I'm only 28 years old, I did this as a a favor to my father, to use my name for this, from which I did not even benefit from. Messed up situation. My credit otherwise is in good standing. And I am also a stock broker so this will definitely affect my job but I really have no way out.

[LadyInTheRed]

Welcome to bkforum!

My understanding is that a foreclosure is as bad as BK on your credit rating.

I am guessing the loan is a recourse loan which means if they foreclose, they can still sue to collect the difference between the value and what you owe.

Yes, if the corp files BK, you would have to file BK to keep the lender from looking to you for payment.

Most credit card companies will close your accounts when you file BK, but not all. AmX did not close my account. All others did, including those with no balance.

Chap 7 is better if you can qualify and don't have a reason to prefer Chap 13 like being delinquent on a loan secured by an asset you need to keep, or having non exempt assets you need to keep. If most of your debt is businesses debt, which sounds likely, qualifying for a Chap 7 is not an issue because you wouldn't have to pass the means test.