In 2005 my business in PA (s-corp, 100% owned by me), received a loan for $15k. The business opened in 2002 and was not making any money and never did. To receive the loan, I signed a personal guarantee and offered my home as collateral. Prior to receiving the loan, we had not filed any taxes. To get the loan, we had to file taxes, so the lender (a non-profit incubation organization) arranged to have another of its affiliated businesses complete our taxes. After we received the $15k, we paid another $3-3,500 in accountant fees.
We hit a hard couple of months the following winter and fell behind in our payments. I wrote a couple letters to the lender asking how to make arrangements to get back on track. I did not receive any response. In August 2006, our store was broken into and someone was murdered on the corner. Our lease was up and we finally decided to call it quits. We did not officially dissolve the business.
We moved from the house used as collateral, however, I still own it and rent it out. I never received anything from the lender until just this month - a notice that a money judgment has been entered against me and the business. I have a first mortgage against the house for about $60k and the house is probably worth about that much.
Personally, we are just getting back on our feet. We are making the final payments of arrangements for past due balances on our car loan and our first mortgages on each of the two properties we own (both which were on the brink of foreclosure). We have also defaulted on about $70k in student loans.
I'm not the type to run from problems, but I also can't make money appear from the sky. I don't have cable and we're eating noodles, I can't cut our expenses any more. I had a plan to start paying our student loans after the past due balances on our other loans were paid. Now this debt is being thrown into the mix.
My question is, will the house be auctioned? Is there a way to reduce this debt? Can I ignore it temporarily until I can come up with some sort of repayment plan?
We hit a hard couple of months the following winter and fell behind in our payments. I wrote a couple letters to the lender asking how to make arrangements to get back on track. I did not receive any response. In August 2006, our store was broken into and someone was murdered on the corner. Our lease was up and we finally decided to call it quits. We did not officially dissolve the business.
We moved from the house used as collateral, however, I still own it and rent it out. I never received anything from the lender until just this month - a notice that a money judgment has been entered against me and the business. I have a first mortgage against the house for about $60k and the house is probably worth about that much.
Personally, we are just getting back on our feet. We are making the final payments of arrangements for past due balances on our car loan and our first mortgages on each of the two properties we own (both which were on the brink of foreclosure). We have also defaulted on about $70k in student loans.
I'm not the type to run from problems, but I also can't make money appear from the sky. I don't have cable and we're eating noodles, I can't cut our expenses any more. I had a plan to start paying our student loans after the past due balances on our other loans were paid. Now this debt is being thrown into the mix.
My question is, will the house be auctioned? Is there a way to reduce this debt? Can I ignore it temporarily until I can come up with some sort of repayment plan?
