Can a bank come back on me for a debt under my LLC?

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Can a bank come back on me for a debt under my LLC?

I have a 5-wheel RV registered under my LLC. I am retired and cannot continue to pay for this RV. Can the bank file suit on me personally? I am not behind on this loan at this time but I cannot afford to pay the $465 a month.

Asked on October 17, 2011 under Bankruptcy Law, Tennessee

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

The issue is not so much who/what has registered the RV, but:

1) Who signed for the loan? Did you sign for the loan personally? Or was it the LLC which took out the loan, and if you signed, it was as an officer or managing member of the LLC?

2) If it was the LLC which took out the loan, did you personally guaranty it?

If you either took out the loan in a personal capacity or you personally guaranteed a loan made to your LLC, then the bank could clearly proceed against you personally. However, if neither of these were the case, then normally, for a loan taken out by an LLC and not personally guaranteed by an owner, the bank should have recourse only against the income and assets of the LLC itself.


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