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PERSONAL GUARANTEES - A 2 Chance to Collect
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Do bankruptcies always stop your collection efforts?
A corporate bankruptcy may not dash your chances of payment if

you have a personal guarantee.

Despite a previous lawsuit and settlement, our Client was trying to collect on past due

payments under the settlement agreement. The payments had stopped, and it became

obvious the Company was in trouble financially.

We filed a new lawsuit for the Client and moved for a summary judgment to get the
judgment as soon as possible. On the morning that the summary judgment was to be argued

before the judge, the Debtor Company filed for bankruptcy only minutes before the

hearing. The Judge opened the hearing believing that, “The bankruptcy puts a kibosh on
the case.” Everyone expected the bankruptcy to delay any kind of proceeding.

But this case was different. The Owner of the Debtor Company had agreed to a personal

guaranty and was a co-defendant in the lawsuit. The motion for summary judgment asked

for a judgment against both the Company and its Owner individually.