PARTNERSHIP LIABILITY

 My partner and I have a business and recently because of many reasons we accrued debts of nearly $100,000. We just don’t have the money in the partnership bank to pay that kind of money. Someone told us that  we can just go bankrupt and not pay the money. Is that right?

 

Not quite. First as partners you are jointly and severally absolutely liable – meaning both of you are liable jointly and individually. Your creditors are likely to send you a letter of demand followed by a summons for the money you owe them. Now, if you or your partner have assets –  a car, boat, property, shares or other assets, your creditors will obtain a court order for the debts you owe them plus any expenses as would be shown on the summons. If you do not have any cash at all and have no assets, the creditors do have an option to bankrupt you. At the moment to bankrupt someone there has to be proof of debt of just $1,500 – check with your lawyer for updates on bankruptcy.

Advertisements

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: