questions & answers
Question: My spouse signed a personal guarantee for his business (an AZ LLC). If his debtor tries to collect, what is at risk? If we have been married for more than 15 Years, is our property or just his at risk?
The following is provided for general information only. To find out how the law applies to a specific situation, contact an attorney directly.
In the case of a Personal Guarantee, a business owner places full responsibility on themselves to repay a debt. In the case that a debt cannot be paid after a personal guarantee is made, personal property can be collected in order to repay the debt. Depending on the state, community property can be collected to resolve a debt.
Arizona is a Community (http://www.azleg.gov/FormatDocument.asp?inDoc=/ars/25/00211.htm&Title=25&DocType=ARS) property state. Property that is gained during a marriage is considered community property. A.R.S. 25-215 (http://www.azleg.gov/FormatDocument.asp?inDoc=/ars/25/00215.htm&Title=25&DocType=ARS) states that both can be held responsible for the debts that are incurred by either spouse as well as state the exceptions to what a spouse is responsible for. A.R.S. 25-211 (http://www.azleg.gov/FormatDocument.asp?inDoc=/ars/25/00211.htm&Title=25&DocType=ARS) defines what property is considered community property and the exceptions. For more information about community property follow the link to read A.R.S. 25-211 et. al. (http://www.azleg.gov/ArizonaRevisedStatutes.asp?Title=25).
My spouse signed a personal guarantee for his business (an AZ LLC). If his debtor tries to collect, what is at risk? If we have been married for more than 15 Years, is our property or just his at risk?
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