divorce/debt

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

divorce/debt

if you own a business together and the business isnt doing good and you get a divorce are both still affected by the business debt?

Asked on June 1, 2018 under Family Law, Georgia

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

If the business were a partnership (not an LLC, an actual partnership), then all partners (e.g. both spouses, if the spouses were partners in it) are responsible for the debt.
If the business were an LLC or a corporation, then the owners are NOT responsible for most business's debts (exceptions listed below)--the whole point of an LLC or corporation is to protect the owners from business debts, obligations, and liabilities. So in this case, neither would be affected by the business debt.
Exceptions, where the owners of an LLC or corporation can be responsible for debts:
1) Any debts they personally guaranteed;
2) "Business" credit cards taken out in their own name (if they personally signed the credit card agreement, they are responsible for the charges);
3) Certain "fiduciary" tax debts, such as sales or payroll taxes, where the owner responsible for administrating/overseeing collecting and remitting the taxes is responsible for them;
4) If the owners did not respect the independent existence of the LLC or corporation and instead used it as an extension of their own finances (e.g. no real boundaries between their business and them as persons), in which case creditors may be able to "piece the corporate veil" and bypass the LLC/corporate protection;
5) Amounts owed not soley by the business but also by an owner for his/her own personally wrongful behavior (e.g. if you run someone over while driving a company vehicle for work, the company is liable as your employer--but you would also be liable for being the negligent or careless driver).


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption