After 10 years in a sole owner business, I need to close the doors. I am in debt to the tune of $100,000 in unsecured credit card/line of credit debt. Business went down hill quickly and wasn't able to clear out the debt. I realize bankruptcy is not to be taken lightly, however, business is off by 82% and I can find no way out. Taking out a home equity loan is just another loan to be repaid by a business that is no longer a going concern. Which chapter type should I apply for and as all the debts are personal, can my home be protected from creditors in california. I would never have even thought of bankruptcy 5 years ago, but now, it appears to be my only way out for a fresh start...currently, credit report is excellent and realize this will damage it. I am sorry that it has come down to this. Any advice greatly appreciated.
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Personal Bankruptcy bankruptcy
- Thread Starter asnoogle
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Is the business incorporated? Are your loans secured personally? One would need to know many of the specifics with regard to your situation, including property ownership, in order to make a decision. You may be limited to a chapter 7 bankruptcy. Here is a quote taken directly from the FTC web site:
Chapter 13 allows you, if you have a regular income and limited debt, to keep property, such as a mortgaged house or car, that you otherwise might lose. In Chapter 13, the court approves a repayment plan that allows you to pay off a default during a period of three to five years, rather than surrender any property.
Chapter 7, known as straight bankruptcy, involves liquidating all assets that are not exempt. Exempt property may include cars, work-related tools and basic household furnishings. Some property may be sold by a court-appointed official-a trustee-or turned over to creditors. You can receive a discharge of your debts under Chapter 7 only once every six years.
Both types of bankruptcy may get rid of unsecured debts and stop foreclosures, repossessions, garnishments, utility shut-offs, and debt collection activities. Both also provide exemptions that allow you to keep certain assets, although exemption amounts vary. Personal bankruptcy usually does not erase child support, alimony, fines, taxes, and some student loan obligations. Also, unless you have an acceptable plan to catch up on your debt under Chapter 13, bankruptcy usually does not allow you to keep property when your creditor has an unpaid mortgage or lien on it.
Chapter 13 allows you, if you have a regular income and limited debt, to keep property, such as a mortgaged house or car, that you otherwise might lose. In Chapter 13, the court approves a repayment plan that allows you to pay off a default during a period of three to five years, rather than surrender any property.
Chapter 7, known as straight bankruptcy, involves liquidating all assets that are not exempt. Exempt property may include cars, work-related tools and basic household furnishings. Some property may be sold by a court-appointed official-a trustee-or turned over to creditors. You can receive a discharge of your debts under Chapter 7 only once every six years.
Both types of bankruptcy may get rid of unsecured debts and stop foreclosures, repossessions, garnishments, utility shut-offs, and debt collection activities. Both also provide exemptions that allow you to keep certain assets, although exemption amounts vary. Personal bankruptcy usually does not erase child support, alimony, fines, taxes, and some student loan obligations. Also, unless you have an acceptable plan to catch up on your debt under Chapter 13, bankruptcy usually does not allow you to keep property when your creditor has an unpaid mortgage or lien on it.
The business in an unincorporated sole ownership and has been in existance for 12 years. All debts are on personal lines of credit and credit cards. The only real property owned is a house (value $225,000, with $181,000 owed). The family has two cars (leased). I have a side job (in addition to the business) which pays $5000/month, however, bills are $8,000/month. I have contacted the credit card companies and let them know chapter 7 was a reality as the business has failed badly. I have already asked them if they would consider an offer/compromise. All have said no. There is only a limited amount of inventory left in the business, about $3000.
Well, you may as well tell them that they aren't going to squeeze blood from a stone and see what they say. I'm not sure why you would file for bankruptcy since your house as far more equity than the amount of your debts.
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