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  1. #1
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    Nov 2011
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    Default Two Businesses, One Credit Line

    My question involves business law in the state of: Colorado
    I own two separate LLCs, one formed in 2004 and the other in 2007. Each has different name, address and EIN. I opened up a credit line with a supplier in 2005 with a personal guarantee. Never used much. In early 2008 i opened what I thought was another different credit line at the same supplier with the new company. This line was used lots. Now business is slow and I owe money on 2008 credit line with new company. after reviewing the account I discovered that the supplier did not open a new separate credit line for new company but changed name on the old credit line. Which credit contract is good? The twist is I declared personal chapter 7 in late 2008 which should have discharged the personal guarantee for at least the older credit line and possibly the new line as well. I can't find information on this situation.

  2. #2
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    Default Re: Two Business One Credit Line

    Did you list the account on your ch. 7 filing?

  3. #3
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    Default Re: Two Businesses, One Credit Line

    You told us that you have one credit line. That would mean that, to the best we can determine, you have one credit line.
    Quote Quoting tntpenguin
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    I declared personal chapter 7 in late 2008 which should have discharged the personal guarantee....
    Assuming it was included in the bankruptcy, at least for pre-petition extensions of credit. You've been carrying an unpaid balance since 2008?

    If yours was a zero assets Chapter 7, the failure to list the debt does not necessarily mean that the discharge of your guarantee for pre-petition purchases didn't occur, but we can't address that without more information.

  4. #4
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    Nov 2011
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    Default Re: Two Business One Credit Line

    I believe I did, but there was no money owed on the original account and the chapter 7 was a no asset discharge. I am trying to get a little leverage to settle the amount that is owed before they try and litigate the matter. Am I correct to argue that the supplier is trying to deny the legal and separate Identity of the two companies even though I own both of them. Any way I look at this the supplier should have issued a separate and new account with a new account number. you cannot assign a personal guarantee to another company even though they may be owned by the same person if they are legally separated by address name and EIN?

  5. #5
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    Sep 2010
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    Default Re: Two Business One Credit Line

    Looks like you owe it. While they may not be able to recover against the inadvertent wrong if your personal guarantee was in place you're still responsible.

  6. #6
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    Default Re: Two Business One Credit Line

    The personal guarantee wasn't assigned to a different company - it was assigned to the single line of credit you obtained and used for both companies.

    During the years you were making purchases, paying bills and allocating your expenses between your two companies, you certainly noticed that you were getting one statement for all purchases, and that they were all under the same account. If you did not want that to continue, you should have said something.

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