Chapter 11 Bankruptcy and County Court

[Millerkan]

My husband had 2 loans with one bank and 2 loans with another bank. Prior to these 2 banks merging, they decided to time all our loans to renew at the same time about 2 months after the merger took place. 3 of these loans were commercial and 1 was residential and all were on short term modifications, anywhere 6 months to 1 to 2 years. The bank told my husband not to make any payments on the loans for over 90 days before the renewals and they would roll the interest into the loan renewals. When it came time to renew, they would not renew unless he cross collateralized the house with the other loans, which the house has over a million dollars of equity in it. In order to renew and do this, he had to sign a document waiving all his rights to sue the bank from past, present and future agreements. He said "no" to this, so the bank sued on all 4 notes and tried to foreclose on all 4 properties. So then my husband filed Chapter 11 and was able to transfer the house into the LLC that the other 3 properties were listed under (due to previously being in the LLC before the house became homesteaded and built). So now the bank is sueing him on his personal guarantees on all 4 loans. Is this legal? How can my husband qualify for Chapter 11 and also be sued in County Court for the personal guarantees on all the loans. If all banks did this, wouldn't it undermine the purpose of Chapter 11? Also, when they wanted him to renew the loans, they wanted him to sign his rights away, but still sign a personal guaranty on the loans. How do you sign a personal guaranty on performance, but have no rights? Without any rights, they could deliberately put him in a position where there would be no way for him to perform and still seek the personal guarantees on the loans? My husband is a commercial builder and needs bonding to be able to work. If they were to win on the personal judgement on his personal guarantees, this would force him into Chapter 7 Bankruptcy and he wouldn't be able to get bonding, and therefore wouldn't be able to work. He has a college degree in building science and has been in business for himself as a general contractor for over 25 years and this is all he knows for work.

 

[army judge]

I suggest you use some of your money to HIRE a lawyer.
A free site can't help you.
His (your) issues are too complicated.
Good luck.

 

[despritfreya]

It appears that your husband did not file Chapter 11. He most likely transferred the residence to the LLC and then put the LLC into a Chapter 11, which makes no sense but - who knows. If I am correct the lender is free to sue your husband. I sure hope the LLC has an attny.

Army Judge is correct. Your husband's situation is not one that can be addressed by an internet forum. Sounds like you have money. Spend it on a good attny.

Des.