A few weeks ago Terry Hoskins bulldozed his home as the bank was foreclosing on the property.
However, his story is not one of a borrower duped into too much house with a subprime loan. His home was pledged as collateral for business loans.
According to Cincinnati.com, he owed $160,000 on a home loan, and he had another $600,000 in business debts. To get the business loans, he had to pledge his home as collateral.
Business owners often have to pledge personal assets when applying for business loans. This is one example of a personal guarantee gone bad.
If you're borrowing for your business, make sure you know whether or not your personal assets are on the line, and try to limit your risk.
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