Quote:
Originally Posted by TheDoc
Business wise, almost all lines of credits at banks today have a personal guarantee on them now. Bankrupting the company doesn't clear that debt, it transfers it to you, personally. If you are married, they can take the money from either of you as well, directly from your check, before you get paid, legally, even if the other person never owned the company. The way around this is collateral, which again, they take if you default.
Adding to that: Point being, they wont let you bankrupt shit anymore unless you are truly bankrupt, even personally. If you can pay it personally, a judge just transfers the debt to you, even b2b owed money.
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In the end I am oversimplifying my statement, but there are a lot of loopholes and things a person can do with company to avoid having their personal property attached to a corporate bankruptcy. I was reading a little while ago about hedge fund guys setting up corps that they used strictly for trading so if they lost and ended up in the negative they could collapse the company and walk away. Of course those are guys who have access to some of the best tax and corporate lawyers in the world, they aren't your typical mom and pop who take out a loan in hopes of opening a cafe that doesn't work out.
It is getting harder to borrow money for a start-up without a personal guarantee, like you say, but the odds of losing on a business, being able to bankrupt the business and keep your personal assets are a lot higher than taking a student loan, defaulting and trying to get out of paying it.