What to do if my business partner and I took out a personal loan and the business paid the first 3 payments but then he quit and hasn’t paid his half for 12 months?

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What to do if my business partner and I took out a personal loan and the business paid the first 3 payments but then he quit and hasn’t paid his half for 12 months?

The loan was for $12,000 with 7% interest, over 24 months. I paid his share and mine to keep the loan current. Can I request that he pays me back for the last 12 months of his half, since we both signed on the loan?

Asked on February 10, 2014 under Business Law, Texas

Answers:

Brook Miscoski / Hurr Law Office PC

Answered 7 years ago | Contributor

I'm assuming that you mean that you and your partner personally guaranteed a loan for the business, or else took out a personal loan to use for the business.

My question would be whether you both guaranteed the loan, or both signed for a personal loan, or whether you took out a loan on your own with the understanding between you and your business partner that the loan was for the business.

Whatever the situation, I'm sure you realize that the bank can come after you for the whole loan, which is one reason why you've kept it current.

But your business partner would still owe you his part of the loan. I can't tell how easy it would be to show that he owes (for instance, if he didn't sign anything) or whether he would be able to pay, but I would still ask him to pay you his half of the loan.


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