What does it mean to have unlimited personal liability?

Unlimited personal liability means that an individual is personally responsible for all debts and obligations of a business, which can include financial losses, lawsuits, and other liabilities. This means that creditors can pursue the individual's personal assets, such as savings, property, and other valuables, to satisfy business debts. This liability is common in sole proprietorships and partnerships, where the business and personal finances are not legally separated. Consequently, the risk for personal financial loss is higher in these business structures.