sonoftheowner
New Member
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.
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.
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