Legal Business Question

[Bizbad]

Hello All,
I posted awhile back about business debt, and whether or not you are personally liable for it. Well, I have another question. I recently went to B of A to get this debt consolidation loan. It is an unsecured loan based on your credit score and income. Anyway, in the application process they brought up my credit report and told me all of the revolving credit I had. However, the business credit card was not on there. I am the sole member of my LLC, and when I applied for the credit card, I had to use my credit history and income to secure the credit line. The CC is in the name of the business, so I am wondering what they would do if the business goes under and I cannot make the $1000/Month minimum payment. Any help would be greatly appreciated. Only reason I am asking these things is because I am in the food service business and it looks grim for us making more than another couple of months. Not trying to scam out of my obligations, just that circumstances suck.

[bmrigs]

Im wondering on this also. I was a single member LLC to a now defunct company but I have a business cc that has racked up 16k of expenses that was used to do business. I do believe that we are obligated personally to pay this debt because a single member LLC is considered a sole proprietorship at least according to the IRS. Anbody else want to give this a shot?

[Flamingo]

Both of you should have employment contracts if you were given a company credit card. The handling of that card will be explained in your employment contract. If the card was obtained utilizing your SS number and credit, it is almost certainly your obligation. Company cards are issued to allow the employee to utilize them for business expenses for which the employee is eventually reimbursed so, therefore, that the employee does not have to utilize their own personal credit cards. If you travel you know you can rack of thousands of dollars per trip, with several trips maybe per month.

If you utilize those cards for personal items also, they are your responsibility.

All that should have been explained to you upon having the card issued to you or on application and should also be mentioned in your employment contract.

[Tromploi]

I posted about this yesterday although mine could be different (several posts down, personal filing, biz cc's). I am an LLC, sole member, and I have a cc in my biz name I am including in my personal BK. I did get the card prior to being an LLC though and it was acquired using my SS#, as I just got my EIN yesterday when opening a new business checking acct. The reply was that it would be listed as any other unsecured debt. So hopefully that's the case.

[lillaimof2kids]

Our attorney told us that if we used our SS #'s then we're personally liable. Banks rarely, if ever, give small/new businesses loan or cc's without holding you personally liable. We had a LLC we closed in January 08 and filed on everything business and personal. One bank is trying to be difficult with the BK7. They tried saying the loan was only in the business name (which no longer exists). So I had to pull my loan papers and give them to my attorney. So yes they are going on our personal BK.