Central District Consumer Bankruptcy Attorney's Association

Here is a case from Virginia that agrees with Jon, unless the debt arose post-petition.

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Thanks, Patrick and Michael. I may have something to work with here. The debt at issue is only $2,800. It's not clear that the client will want to pay to fight this.
On Wednesday, July 16, 2014 4:07 PM, "'Patrick T. Green' pat@fitzgreenlaw.com [cdcbaa]" wrote:
John:
Look first at 101(5) as to what is a claim & 101(12) as to what is a debt. depends on the occurrence or non-occurrence of a future event. Thus it seems to me that 523 applies to the guarantee.
Others might chime in with something I do not know that leads to different result.
If you have any questions or concerns, please contact someone that will guarantee their advice.
Pat
Patrick T. Green
Attorney at Law
Fitzgerald & Green
1010 E. Union St. Ste. 206
Pasadena, CA 91106
Tel: 626-449-8433
Fax: 626-449-0565
pat@fitzgreenlaw.com
From:cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com]
Sent: Wednesday, July 16, 2014 12:31 PM
To: cdcbaa@yahoogroups.com
Subject: [cdcbaa] Guarantee not erased in discharge
Hello all:
Client got a no-asset chapter 7 discharge in December 2012. In November 2013, a corporation he was involved with ordered goods and defaulted on payment. The debtor was a shareholder in the corporation and had guaranteed payment on the supplier's account in 2008. He then went silent on the corporation; his partner handled everything, including ordering the goods and deciding to default.
Is there any valid argument that the discharge erased his guarantee? I didn't think so: the debt is postpetition, even if the guarantee is prepetition.
As a practice pointer, perhaps we should encourage our clients to divest themselves of interests in corporations that they don't intend to run at the same time that they file bankruptcy.
- John D. Faucher
818/889-8080

The post was migrated from Yahoo.

John:
Look first at 101(5) as to what is a claim & 101(12) as to what is a debt.
Research is quite likely to show a contingent claim/debt is one that depends
on the occurrence or non-occurrence of a future event. Thus it seems to me
that 523 applies to the guarantee.
Others might chime in with something I do not know that leads to different
result.
If you have any questions or concerns, please contact someone that will
guarantee their advice.
Pat
Patrick T. Green
Attorney at Law
Fitzgerald & Green
1010 E. Union St. Ste. 206
Pasadena, CA 91106
Tel: 626-449-8433
Fax: 626-449-0565
pat@fitzgreenlaw.com

The post was migrated from Yahoo.

If you would like arguments for why a guarantee is discharged, see:

The post was migrated from Yahoo.

From a practice pointer standpoint, I'd say any potential creditor to
which a client provided a personal guarantee should be listed and noticed in the
bk, even if the client believes nothing is owed. Furthermore we should inform the debtor to promptly write a lettter notifying that potential
creditor of the termination of the personal guarantee relating to any future
orders.
Mark T. Jessee
Law Offices of Mark T. Jessee
"A Debt Relief Agency"
50 W. Hillcrest Drive, Suite 200
Thousand Oaks, CA 91360
(805) 497-5868 (805) 497-5864 (Facsimile)
In a message dated 7/16/2014 12:31:09 P.M. Pacific Daylight Time,
cdcbaa@yahoogroups.com writes:
Hello all:
Client got a no-asset chapter 7 discharge in December 2012. In November
2013, a corporation he was involved with ordered goods and defaulted on
payment. The debtor was a shareholder in the corporation and had guaranteed
payment on the supplier's account in 2008. He then went silent on the
corporation; his partner handled everything, including ordering the goods and
deciding to default.
Is there any valid argument that the discharge erased his guarantee? I
didn't think so: the debt is postpetition, even if the guarantee is
prepetition.
As a practice pointer, perhaps we should encourage our clients to divest themselves of interests in corporations that they don't intend to run at the
same time that they file bankruptcy.
- John D. Faucher
818/889-8080
From a practice pointer standpoint, I'd say any potential creditor to
which a client provided a personal guarantee should be listed and noticed in the
bk, even if the client believes nothing is owed. Furthermore we should
inform the debtor to promptly write a lettter notifying that potential creditor
of the termination of the personal guarantee relating to any future
orders.

Mark T.
JesseeLaw Offices of Mark T. Jessee"A Debt Relief Agency"50 W.Hillcrest Drive, Suite 200Thousand Oaks, CA 91360(805) 497-5868 (805)
497-5864 (Facsimile)

In a message dated 7/16/2014 12:31:09 P.M. Pacific Daylight Time,
cdcbaa@yahoogroups.com writes:




The post was migrated from Yahoo.

Mark T. Jessee
Law Offices of Mark T. Jessee
"A Debt Relief Agency"
50 W. Hillcrest Drive, Suite 200
Thousand Oaks, CA 91360
(805) 497-5868 (805) 497-5864 (Facsimile)
NOTICE TO RECIPIENT: THIS E-MAIL IS MEANT FOR ONLY THE INTENDED RECIPIENTOF THE TRANSMISSION, AND THIS COMMUNICATION IS INTENDED TO BE PRIVILEGED BY
LAW. IF YOU RECEIVED THIS E-MAIL IN ERROR, ANY REVIEW, USE, DISSEMINATION,DISTRIBUTION, OR COPYING OF THIS E-MAIL IS STRICTLY PROHIBITED. PLEASE
NOTIFY US IMMEDIATELY OF THE ERROR BY RETURN E-MAIL AND PLEASE DELETE THISMESSAGE FROM YOUR SYSTEM. THANK YOU IN ADVANCE FOR YOUR COOPERATION.
In a message dated 7/16/2014 12:31:09 P.M. Pacific Daylight Time,
cdcbaa@yahoogroups.com writes:
Hello all:
Client got a no-asset chapter 7 discharge in December 2012. In November
2013, a corporation he was involved with ordered goods and defaulted on
payment. The debtor was a shareholder in the corporation and had guaranteed
payment on the supplier's account in 2008. He then went silent on the
corporation; his partner handled everything, including ordering the goods and
deciding to default.
Is there any valid argument that the discharge erased his guarantee? I
didn't think so: the debt is postpetition, even if the guarantee is
prepetition.
As a practice pointer, perhaps we should encourage our clients to divest themselves of interests in corporations that they don't intend to run at the
same time that they file bankruptcy.
- John D. Faucher
818/889-8080


Mark T.
JesseeLaw Offices of Mark T. Jessee"A Debt Relief Agency"50 W.Hillcrest Drive, Suite 200Thousand Oaks, CA 91360(805) 497-5868 (805)
497-5864 (Facsimile)NOTICE TO RECIPIENT: THIS E-MAIL IS MEANT FOR ONLY
THE INTENDED RECIPIENT OF THE TRANSMISSION, AND THIS COMMUNICATION IS INTENDED
TO BE PRIVILEGED BY LAW. IF YOU RECEIVED THIS E-MAIL IN ERROR, ANY REVIEW, USE,
DISSEMINATION, DISTRIBUTION, OR COPYING OF THIS E-MAIL IS STRICTLY PROHIBITED.
PLEASE NOTIFY US IMMEDIATELY OF THE ERROR BY RETURN E-MAIL AND PLEASE DELETE
THIS MESSAGE FROM YOUR SYSTEM. THANK YOU IN ADVANCE FOR YOUR COOPERATION.

In a message dated 7/16/2014 12:31:09 P.M. Pacific Daylight Time,
cdcbaa@yahoogroups.com writes:




The post was migrated from Yahoo.

Hello all:
Client got a no-asset chapter 7 discharge in December 2012. In November 2013, a corporation he was involved with ordered goods and defaulted on payment. The debtor was a shareholder in the corporation and had guaranteed payment on the supplier's account in 2008. He then went silent on the corporation; his partner handled everything, including ordering the goods and deciding to default.
Is there any valid argument that the discharge erased his guarantee? I didn't think so: the debt is postpetition, even if the guarantee is prepetition.
As a practice pointer, perhaps we should encourage our clients to divest themselves of interests in corporations that they don't intend to run at the same time that they file bankruptcy.
- John D. Faucher
818/889-8080

The post was migrated from Yahoo.