Skip to content


Business Sense To Save Dollars: The Guarantor

You want me to sign what?

You want me to sign what?

This is the first post in a business-oriented series designed to educate about general business practices and develop a measure of business sense. It is business sense that could save you (many) dollars!

The Guarantor

What is a guarantor?

In lay terms, a guarantor is a co-signer of a loan. The guarantor promises to pay a debt on behalf of another person if that other person fails to pay (defaults). Guarantors are commonly required by lenders in many commercial transactions, such as student loans and transactions involving real properties. When a lot of money is at stake, do not be surprised to see the lender require a guarantor.

A properly registered and licensed company is a legal entity that is treated just like another human being in the eyes of the law. Depending on how the business is set up, an owner may or may not be personally liable for the debts of the company. Even if the company is set up in a way that protects the individual assets of the owners, an owner or officer can still find themselves personally liable for a business debt owed by the company if they sign a contract as a guarantor of a debt owed by the company.

What does it mean for an owner or officer to be personally liable? In plain English, that means that the lender can sue the owner or officer as an individual and obtain a judgment against them that puts their individual assets (their house, their car, their furniture, etc.) at risk of being sold in order to pay back the debt.

The implications are serious and should not be taken lightly. If you own or are a partner in a business, you need to take the time to understand what it is you are getting into if you are asked to sign a contract as a guarantor. You need to think: how much could I potentially be sued for? What are the company’s resources for paying the debt? How does the company plan to pay this debt? Who else is guaranteeing the debt, and do they have the resources to pay it in the event that the company cannot?

These are just a few of the questions you should be asking yourself when analyzing a deal requiring you to be a guarantor. But a bigger question looms: can you trust the company or your business partners to pay the debts? If the answer is no, you should seriously reconsider guaranteeing any loan or obtaining a loan at all.

A friend of mine recounted a tale of woe where he ended up guaranteeing the debt of a company in which he was involved. I had to wonder how he got into the mess. What happened was that the business partner was a charming guy that had a lot of energy and ideas, but no practical business sense. The money borrowed went into producing a product that didn’t sell. When the time came to pay back the debt, there was no money and the partner had put the company’s assets at risk of foreclosure. Moreover, the partner had no assets of his own to put toward the company’s debt. My friend got left “holding the bag.”

Don’t let something like that happen to you. Take great care in selecting businesses and business partners. Be wary of partners with great ideas and no assets. Be especially wary if they have bad credit and cannot obtain a loan on behalf of the company. That is huge red flag.

Don’t put your assets at risk for things you don’t understand or marginally understand. If you need help understanding the contracts you are signing, you should consider hiring an attorney to help you sort through the contract terms and drafting contracts so that you as an individual and the company are protected to the maximum extent under the law.

Posted in Business, Business Sense To Save Dollars.


Domestic Violence Awareness Month

©iStockphoto.com/JuanmoninoOctober is Domestic Violence Awareness Month.

If your partner threatens you physically or emotionally, manipulates you, demeans you or intimidates you, you are in an abusive relationship. If you are in an abusive relationship, you should seek help.

You might need a civil protective order, an injunction, or other legal action depending on your situation. Know your rights, and take action. No one should have to live in an abusive home.

There are also other resources available to help victims of domestic violence, locally and nationally. The following is just a sample:

DC Coalition Against Domestic Violence
5 Thomas Circle Northwest
Washington, DC 20005
Phone: 202.299.1181
Fax: 202,299.1193
Website: www.dccadv.org
Email: info@dccadv.org

National Domestic Violence Hotline: 800.799.7233 (SAFE)

Posted in Family Law.


Tweeting on Twitter!

I’ve got a new Twitter account! You can follow me there: http://twitter.com/charlenekowesq.

It will be a challenge to say things in 140 characters or less, but it’s a great way to get brief updates when I update the site with a new article. See you there!

Posted in Administrative.


Site Redesign!

It’s still a work in progress but I’ve found a new theme that I like that is a little more exciting to me than the last. The other theme was really great, in that it was very clean and accessible but this one has more energy and a third column that I have plans for. :)

I’ve also put in some pictures of myself in the gallery, which will fill up a little more in coming days.

Posted in Administrative.


Custody and Access

©iStockphoto.com/bjones27I was extremely disheartened to read this article in the New York Times about a soldier who left home to serve in Iraq, only to return to a custody dispute with her ex-boyfriend over access to their 2 year old child.

Although she and her ex had drafted a family care plan with the assistance of “military officials” that provided for shared custody upon her return, her ex chose not to honor it when she came home and severely restricted access to the child. He determined that the mother’s presence would be “too disruptive” for the child to spend much time with “a mother that she doesn’t really know or recognize that well.”

Although plausible to some degree, it’s probably more disruptive to him than the child, since the parties are not a couple anymore. While children do need routines, they are more resilient than we tend to think. More importantly, however, they also need both of their parents.

A liberal visitation arrangement is almost always available, except where it truly would not be in the child’s best interest.

Fortunately for the soldier, the outlook for the soldier’s situation is good: the Court issued a temporary order yesterday granting liberal access to the child.

As a former service member myself, it’s disappointing to see that when push came to shove, the family care plan was not really worth the paper it was written on. As an attorney, however, I am not surprised. Private agreements are good to have, but they are not worth much if they cannot be enforced when they are not honored. And despite everyone’s good intentions, people may still end up in court to resolve the dispute. The soldier mentioned here racked up over $6,000 in legal fees as a result of this case.

People are people, and sometimes they change their minds regarding the agreements they make. We are emotional beings, and our decisions often ebb and flow with the tide of our feelings. In domestic relations, this is extremely common and a trip to the courthouse is often inevitable when the parties cannot agree about the care of the child(ren).

In one sense, married couples that divorce have it a bit easier in that there is far less ambiguity once the couple divorces – the Court will determine custody, support and visitation rights as part of the divorce. Unmarried couples don’t have the benefit of court oversight when dealing with property, custody and the other matters incidental to a break-up.

However, unmarried couples that have children have the same parental rights and responsibilities as married couples, and should seek a formal arrangement if they cannot agree on the issues pertaining to the child, especially when access is disputed. A mother or father doesn’t have the wholesale right to deny access to children. Sometimes, when drama runs deep, a court order is the only way to ensure that the noncustodial parent has access.

In many respects, it is better to obtain an official adjudication of rights, as it erases most of the ambiguity surrounding the parties’ rights and the decisionmaking process. If you and your ex can agree on any of the pertinent issues, a court will likely incorporate any agreements you make into the formal order.

If you and your ex don’t get along, don’t wait until the drama escalates too much before suing for custody. That is more likely to bring on additional legal fees due to petty motion practice.

One other thing to take away from the article is that for military families, you need to be aware that JAG isn’t going to help you with a custody dispute. That’s not their job.

While JAG does assist with administrative tasks such as preparation of wills, they are not your personal counsel unless you are subject to discipline under the Uniform Code of Military Justice (UCMJ) and you elect to have a JAG officer from the Trial Defense Service represent you. TDS lawyers are like court-appointed attorneys. You can still elect to retain your own civilian counsel to represent you in the event that you are subject to disciplinary action.

*Reminder: notice

Posted in Family Law.


A Few Thoughts On Fault and Divorce

©iStockphoto.com/StephanHoerold
In the District of Columbia, you do not need a reason, or fault, to get a divorce. A married couple can obtain an absolute divorce after voluntarily separating from each other without cohabitation for 6 months. Additionally, absolute divorce can be granted after living separately and apart without cohabitation for over a year, even if it was not voluntary. That’s all it takes. See DC Official Code § 16-904.

The days of fault being a controlling factor in divorce are long gone, as the Court will divide property and award custody and support along equitable lines. This does not mean that fault, such as adultery or abuse, will not be a factor in the divorce. It is just one of many factors that the Court must consider when determining the equitable distribution of property between a couple. See DC Official Code § 16-910.

At the same time, one should not presume that just because their spouse cheated on them that they will “get the house,” especially if children are involved, and neither should one presume that all debts and assets will be split 50-50. The Court will examine the totality of a couple’s financial situation before rendering a decision.

In these troubled economic times, it becomes a bigger challenge as some people find that they cannot afford to live apart from their spouse outside the marital home. This doesn’t mean that such a couple can’t get divorced, but it is somewhat awkward to try to live separate and apart while under the same roof. It can be done, it just takes a bit more thought to keep your lives separate.

Like good marriages, good divorces require good communication. The more you can agree to with your spouse, the better, as there will be less issues to be litigated through your attorneys. By not focusing on the emotional component of fault and instead focusing on the task at hand of separating property equitably, you can save a few dollars in legal fees by keeping the drama low. That’s always easier said than done, of course, but forcing motion practice is the far more costly alternative.

*Reminder: notice

Posted in Family Law.


Volunteering: Good for the Soul

In these tough times, something that helps take our minds off our own situation is helping others. Today, I volunteered to assist some World War II veterans from Iowa tour the World War II Memorial. The World War II Memorial is exquisite and lovingly made, and is one of our finest memorials. It was a beautiful day and it was personally rewarding to assist other veterans, especially such distinguished heroes as these. They are a rare breed.

Me with my veteran:

You can find volunteering opportunities through Serve.gov and volunteer groups via the Internet. I found this through a volunteering group at Meetup.com.

Posted in Non-Legal.


No “Death Panel” Necessary – Use Advance Directives

Although the government is nowhere near instituting a “death panel” to determine whether or not you may be eligible to receive health care, it is still prudent to think about how you would like to be treated in the event that you are incapacitated.

Many people are one medical crisis away from bankruptcy. Would you want herculean efforts to preserve your life, even if it could bankrupt your family?

Who is going to make decisions for you in the event that you cannot make decisions for yourself?

Would you like to donate your organs to someone who needs a transplant, or to enhance scientific research?

How will you preserve the dignity of your body?

These are all important topics that every individual should consider and memorialize in a Living Will, along with a Durable Power of Attorney for Healthcare. The Living Will expresses your desires concerning your healthcare in the event of incapacity, and the Durable Power of Attorney for Healthcare gives someone else the power to make decisions for you when you cannot make them yourself. With these two advance directives, you can ensure that both your family and any health care facilities that treat you know what your wishes are in the event that you cannot communicate them for yourself.

Most people don’t want a doctor making a decision that only they or their family should make. Make sure your wishes are known by making a Living Will and Durable Power of Attorney for Healthcare.

Posted in Advance Directives.


Congratulations Justice Sotomayor!

Judge Sonia Sotomayor has been confirmed by the Senate to be the Supreme Court’s 111th justice. She is easily one of the most qualified judges appointed to the Court in years. Thank goodness the politicking is over regarding her nomination, and I do look forward to seeing her contributions and reasoning.

Hat tip: Washington Post.

Posted in Courts.


A Bit of Levity

Most Internet-connected folks have probably seen the JK Wedding Entrance Dance by now. If you haven’t, the link is there, follow it! It’s cute.

But now comes the divorce entrance dance, by New York company Indigo Productions. It’s highly cynical but very funny, and ultimately they wish the newlyweds well.

Hat tip to the folks at Legal Blog Watch.

Posted in Family Law.