Georgia Congressman and State legislator had their reputation, sullied fierce business deal. Partners hit the motel biz with bank credit, which they personally guaranteed. This whole thing unravel and their lawyer said that the Bank should have known better than to rely on these legislators personal guarantees.
Personal guarantees legislators borrowing not worth peanuts business personal guarantees business debts is usually small-business owners, guaranteeing or possess credit puts you on the hook and can spell problems as this article? Share it with others using this link http://bit.ly/nCJAa9 :
OK you can stop snickering now. Let's just say if you're going to give money to someone's promise to pay him to be sure of their ability and sincerity-even if they don't already elected officials. Also making matters worse, taxpayers are on the hook for $ 100,000 to demolish motel.
In general terms "personal guarantee"-does anyone have the floor. This is a bad thing if the word is not good. From a legal point of view "personal guarantee" that promise to pay the debt, if the debtor does not. These legislators ran their Motel business as a corporation. Where a company borrowed money from the Bank, it has become standard procedure for the Bank to get legislators to guarantee personally corporate debt.
The guarantee is to have the loan. The big difference is that the one who guarantees the credit is usually not on the hook to the main debtor default. Someone co-signs credit can be done to pay it when communicating. The lender does not require payment from the primary or lawsuit borrower first.
Congressman at least learned his lesson. In the recent federal debt ceiling he swore off further borrowing by the Federal Government, even if it is not required to personally guarantee that borrowing. If you agree with this point of view, what would you say the loss of his bank is your profit.
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