Consumer Law, Warranties Contract Question of personal guarantee

[sonoftheowner]

HELP!! Contract Question of personal guarantee

thanks for reading my post and hope to get some good answers. This may be long and forgive me. This incident is in Raleigh, NC.
My mom owned a computer business for 2 years. 2002-2004 She had a credit line with first citizens bank and continued to pay it off anually. Each renewal period, she signed a new personal guarantee. At the beginning of the 3nd year she was able to sign the personal guarantee in the companies name. She even asked the bank officer if this got her out of being responsible for the debt personally. The bank officer confirmed.

All was going well for a couple of weeks after she signed the new conditional guaranty agreement in the companies name, until she found out that her manager was ordering expensive items and selling them for cash and keeping the money. This had been going on for a few weeks and he got the credit line up to $42,000! Well with this news, from a loyal employee, she had not option but to close the business and try to recoupe from this tragedy.
The bank inturn is sueing her for default on payment. The bank is stating that she and my father are the unconditional personal guarantee's from the previous guaranty agreement and the last form she signed does not remove the debt from them. They skipped mediation and moved to a summary judgement against them.
Would it be correct to say that the final document did actually move the debt to the business and relieved her from the debt? Or did the bank officer mislead her.

Thanks for your time.

 

[mike]

thanks for reading my post and hope to get some good answers. This may be long and forgive me. This incident is in Raleigh, NC.
My mom owned a computer business for 2 years. 2002-2004 She had a credit line with first citizens bank and continued to pay it off anually. Each renewal period, she signed a new personal guarantee. At the beginning of the 3nd year she was able to sign the personal guarantee in the companies name. She even asked the bank officer if this got her out of being responsible for the debt personally. The bank officer confirmed.

All was going well for a couple of weeks after she signed the new conditional guaranty agreement in the companies name, until she found out that her manager was ordering expensive items and selling them for cash and keeping the money. This had been going on for a few weeks and he got the credit line up to $42,000! Well with this news, from a loyal employee, she had not option but to close the business and try to recoupe from this tragedy.
The bank inturn is sueing her for default on payment. The bank is stating that she and my father are the unconditional personal guarantee's from the previous guaranty agreement and the last form she signed does not remove the debt from them. They skipped mediation and moved to a summary judgement against them.
Would it be correct to say that the final document did actually move the debt to the business and relieved her from the debt? Or did the bank officer mislead her.

Thanks for your time.

First of all, I hope that I hope that your mother took steps to report this bad person to the authorities for grand theft. That doesn't mean you'll get the money back or change the situation unfortunately.

With regard to the alleged bank officer's misrepresentation, it's her word against the officer's. It is certainly possible that your mom didn't quite understand everything that was said. Maybe what was said was vague. It doesn't matter. The key is what is contained on the document in question, which likely doesn't change your mother's personal guaranty. Very rarely is such a guaranty removed for the type of loan you are describing and I'd be surprised if it does and the court seems to think that your mom is still on the hook. The proof is on the paper which your mother should have read carefully before signing, I'm sorry to say. I hope things work out for your mom...