If I have a credit card balance on my business credit card and the business failed, what is my liability?

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If I have a credit card balance on my business credit card and the business failed, what is my liability?

My small business failed. There is a balance left on the business credit card. My partners and I have no assets left.

Asked on November 28, 2011 under Bankruptcy Law, Georgia

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

There is a good chance you are personally liable. Review your credit card agreement: is the agreement between the bank and your company, or between the bank and you personally? Even if between the bank and the company, does the agreement make you personally liable for (e.g. a guarantor of) the debt?

Most "business cards" are actually personal credit cards that may get a better rate and/or have the business name printed on them; however, they are still between the bank and the employee. The business merely pays the bill for the employee, but the employee is the responsible party. (Another tell-tale sign: is your name on the bills/invoices?)

Whomever is responsible under the credit card agreement is the one who is liable.


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