Q: What are my options, if i'm being sued as a guarantor for a loan?
I signed as a guarantor for a loan, as well as I signed as the manager for an LLC that I owned. The loan was secured by a property that was owned by the LLC. The LLC sold the property in a quit-claim deed. To another person with the loans attached to the deed. With the understanding that the property would be re-sold and the loans paid off. The new owner has not sold the property and now I'm being sued, and the lender wants to foreclose on the property. I no longer own the business that the loan was associated with. The property is worth more than what the loan is worth. Should I fight it? Or let it go to foreclosure as I have no stake in the property.
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A: No lender gives money only to a single member LLC. Lender probably does not have to go after any collateral first in a guaranty, but that may be a defense. Deed in lieu of foreclosure may be an option. Breach of contract action against owner may be worth something. Consult with a competent HI attorney to declare exempt properties since any money judgment will entail collection actions against you. Bankruptcy may be an option. Settlement after the note deficiency is determined may also be an option.
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