Small Business Bankruptcy: When Your Personal Guarantee Is on the Line
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Small Business Bankruptcy · Personal Guarantees · Free Consultation
When Your Personal Guarantee Is on the Line
If you signed a personal guarantee to get financing for your business — a loan, a lease, a line of credit — that signature is what determines whether closing the business actually ends the debt, or just moves it into your personal life. Most small business owners find this out the hard way: the LLC closes, and the calls keep coming anyway.
Industries Where This Is Especially Common
Auto Dealers
Floor plan financing — the credit line that keeps cars on your lot — is almost always personally guaranteed. When a lender tightens or pulls the line, that debt can follow you individually.
Restaurant Owners
Commercial leases and equipment financing are routinely personally guaranteed. A restaurant can close and the lease debt can still follow the owner.
Don’t see your industry listed? Personal guarantees show up across almost every kind of small business — contractors, retail, salons, trucking, and more. The two pages above are examples, not the only businesses we help. If you signed personally for anything related to your business, reach out regardless of your industry.
Your Options, Depending on Where You’re At
| If you’re… | This usually fits | What it does |
|---|---|---|
| Closing for good, want the personal debt gone | Chapter 7 | Eliminates personally guaranteed business debt, typically within 3-5 months |
| Want to keep the business open, debt under the small-business threshold | Subchapter V | Restructure and keep operating, no creditors’ committee, plan due in 90 days |
| Larger operation, or personal exposure too high for Chapter 13 | Chapter 11 | Full reorganization, no debt ceiling, more complex and costly |
| An individual whose personal guarantee debt is mixed with other personal debts | Chapter 13 | Reorganizes personal debt over 3-5 years while keeping assets |
Where Your Case Gets Filed
We file in the U.S. Bankruptcy Court for the Middle District of Florida — the Orlando Division for most Central Florida business owners, the Tampa Division for Polk County. It’s the only federal district we practice in, and today nearly all hearings are held remotely by video.
Florida has the highest share of Hispanic-owned small businesses of any state in the country. Attorney Juan Burgos was born in Venezuela and represents clients directly in English, Spanish, and Portuguese — no interpreters, no runaround.
Frequently Asked Questions
What exactly is a personal guarantee?+
It’s a promise you sign as an individual — separate from your business entity — agreeing to personally repay a debt if the business can’t. Lenders and landlords ask for them specifically because an LLC or corporation alone doesn’t guarantee they’ll get paid; your personal guarantee does.
I already closed my business. Am I still on the hook?+
Usually, yes, if you signed a personal guarantee. Closing the LLC ends the business, but a personal guarantee is a separate obligation that belongs to you individually. The lender or landlord can generally still pursue you for the remaining balance unless the guarantee itself is addressed, most often through bankruptcy.
Can I keep my house and personal savings?+
In the large majority of cases, yes. Florida’s homestead exemption is one of the strongest in the country, and retirement accounts are fully protected under federal law. We’ll go through exactly what’s protected in your situation during the consultation.
Do I need to be a U.S. citizen to file?+
No. Florida residency and meeting the income requirements are what matter, not immigration status.
What Our Clients Say
Gracias a su apoyo pude organizar mi situación financiera y atravesar este proceso con confianza y esperanza.
Lo recomiendo 100 % a cualquier persona que necesite un abogado de bancarrota responsable, comprometido y verdaderamente interesado en ayudar a sus clientes.
¡Mil gracias por todo, abogado Burgos!
Bring Your Numbers. Get a Straight Answer.
Free, confidential consultation. Bring your loan, lease, or guarantee documents — you’ll leave knowing exactly which chapter, if any, fits your situation.
By Juan C. Burgos, Esq. — Florida Bar No. 84056. This page is for general educational purposes and does not create an attorney-client relationship or substitute for individual legal advice. Every situation is different. Juan Burgos Law is a debt relief agency under federal law.