Posts Tagged ‘bankruptcy attorney’

Personal Guarantees

Hi, I’m Mike Greiner. I’m a bankruptcy attorney here at the Financial Law Group in Warren, Michigan in Macomb County. Our website is www.financiallawgroup.com and our phone number is (586) 693-2000. I’m here to talk to you today about personal guarantees on business debts.

Something that a lot of people think is that when you have a business, that you’re not going to be liable for the debts that, that you have for the business and that can be true for a lot of the suppliers and other kind of trade debts that you would have. However, when you typically will have a bank loan or a credit card that is a business debt usually there will be a personal guarantee associated with that. Now what that means is even though the debt is a business debt and even though you’ve used that debt for business purposes typically you will be personal liable for that debt just like you would be for personal credit card even though it’s purely something that you used for business purposes and purely something that you used on the base of the business in fact.

Business credit cards typically will not be granted to anybody unless there is a personal guarantee. And that’s usually true also for s.p.a. loans, and other kind of bank loans that would be involved in business cases. So the concern that a lot of people have is that they think that if they shut down a business, that they won’t have to pay on any of these debts anymore. The truth is that usually those debts will follow you, unless you deal with a personal bankruptcy or do some kind of debt settlement. For your personal liabilities for these debts, what makes matters worse a lot of the time is many SBA loans also include a mortgage that is secured by your home. There can be some complex legal issues that need to be addressed to resolve your personal financial liability for any kind of these business debts. Now one thing that’s good about business debts is that there is a different standard that applies.

On the means test for business debts opposed to consumer debts. Let me explain what, what I’m talking about here. When the law changed about five years ago, there was something called a means test that looks at your income, that looks at the size of your household and looks at certain specific deductions you can take to determine if you’re eligible for Chapter 7 bankruptcy.  Well, one of the good things is, is that that means test really only applies if the bulk of your debts are consumer related not business related. However, if you’re a small business person and the bulk of your debt actually are business debts then what that means is that you don’t even have to pass that means just to be able to be eligible for chapter 7 bankruptcy.

So one thing that is good is that you’ll have certain options available to you if most of your debts are business debts as opposed to personal debts and what’s more is the course of rules that even if a debt is a personal debt where you are personally liable for let’s say a credit card that’s a personal credit card if you use those credit cards and those debts for business purposes, and that still applies. An example of business debt is a landlord who owns a lot of real estate but they have a lot of mortgages on all those pieces of real estate. Those would be considered business debts. So you might be eligible for a Chapter 7 case where, because of your income, you might not have been eligible otherwise. So there are some options that are available to people. But what I would strongly suggest someone to do is to talk to a bankruptcy attorney if you’ve got business debts.

Something that’s surprising to a lot of people is that you can often be held liable for them personally, even though they really are business steps. Again with The Financial Law Group here in Warren Michigan, And our phone number is 586-693-2000. And our website is financiallawgroup.com.

Posted by Michigan Bankruptcy Attorney - Michael Greiner Jul 15, 2011
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Michigan Bankruptcy Attorney- Difference Between Wills and Trusts

Hi, my name is Mike Greiner, and I’m an attorney here at the Financial Law Group located in Warren, Michigan. Our website is www.financiallawgroup.com, and our phone number is (586) 693-2000. I’m here to talk to you today about the difference between a will and a trust, in terms of estate planning.

Generally what I suggest to people is that they should do a trust. It’s what I did for my family at the request of my wife and it’s what I suggest for most people where you have any assets you want to have addressed. I’ll tell you why. Most people want to do estate planning for one reason and that is they want to avoid the probate court. Wills do not avoid the Probate Court. A Will is essentially a letter to the Probate Court saying this is how I want my assets to be addressed.

It’s better than nothing but it still means that your estate goes through the probate court. With a trust however you’ve created a separate document, a separate entity that essentially owns your assets until after you’ve pasted and what that means is that you don’t need to go to the probate court at all. It completely avoid probate. There are other advantages as well to trusts. If your a parent of minor children as I am then you can imagine, even if you’re not a particularly wealthy person. You may have life insurance, for example, which could be very substantial, even a couple hundred thousand dollars. Which isn’t a whole lot in terms of life insurance. Would be a hell of a party for an 18 year old who suddenly came into that kind of money. 1 thing you can do with a trust that you cannot do with a will is you can create a situation whereby there’s something called a testamentary trust, where the trust continues past the time that your child reaches their maturity. So for example your able to put in a provision that says, that you want the trust to continue. And your child only gets x percent of the total estate, or x dollars on their eighteenth birthday. Or even later, and then that remaining funds get spent on their education, on health care costs, on housing and health and welfare costs.

This continues on until they reach a certain age at which they can distribute the assets, even into their 30s. You can have a certain amount per year given to the child. You can have set aside even things like money for a wedding and that type of thing. It gives you total control even going into the future so that your child just doesn’t come into a whole bunch of money when they turn 18. And unfortunately, with the will, you don’t have any kind of control like that. So I find that trusts can be very valuable. They do cost a little bit more on the front end because they’re more work but.

But ultimately, I find that they really provide a lot of satisfaction to people going forward. Again, my name is Mike Greiner with Financial Law Group here in Warren, Michigan in Macomb County. Our number is (586) 693-2000. And our website is financiallawgroup.com.

Posted by Michigan Bankruptcy Attorney - Michael Greiner Jun 24, 2011
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