We run a nonprofit mentoring education program and purchased a building several years ago in the company’s name. Our company is suffering from no funds and has not been able to afford the mortgage. We want to let building go. Is this possible? Will we personally be liable? We were required to sign for the loan to close.
You were doing fine up until the last sentence. Frequently, the company is the only entity liable under a mortgage and if it doesn’t have any money, the lender’s only collateral is the property itself. Unfortunately for you, however, it sounds as though you personally guaranteed the company’s debt, in which case you will have to work out an arrangement with the lender to satisfy your obligation. You should consult with an attorney familiar with such situations to explain your obligations and help you negotiate the best possible deal.