Advice needed on business bankruptcy

Discussion in 'Growing and Managing a Business' started by Primer, Oct 17, 2009.

  1. Primer

    Primer
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    Hello, I wanted my first post to be more-- upbeat, but I felt the need to post in a forum I have read for quite some time, but just decided now was the time to ask...

    I am a business owner of a small biz. I have one, a small IT consulting firm that has run into some real difficulty. To make a long story short, I basically was not personally involved enough to see the trouble coming -- dealing with the other operations kept my nose out of things too much. Through a rash of ill prepared decisions, I ended up with debt that I am having trouble rationalizing payoff. As of Sept. 30 the business has been officially dissolved and the assets sold for what I could get to pay the debt. It wasn't enough. Luckily it had nothing to do with my living wage -- I am a full time professor at a university.

    As of today, I have a debt of 27,000 dollars set up in a Chase bank line of business credit with no real funds coming in directed at paying it. It is linked strictly to my old business and does not show up on my personal credit report. It has a modest monthly minimum of around 103.00 per month to keep it current. I COULD pay this out over time and be clear of it, but only out of my salary from teaching -- which pays "ok" but is not making me rich:)

    My real question is this -- Since I have never considered a bankruptcy, personal or otherwise -- is this a situation to consider a chapter 7 and get away from this debt. It would be a major strain to try and pay this off with any speed.


    Thanks so much for anyone's input as to a yes or no -- or if yes, a start with an attorney or other advise..
     
  2. seanstevens

    seanstevens
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    My advice would be to speak to bankruptcy specialist. You will be able to get free advice. You need to make sure you are eligible for a ch. 7 before taking any steps down this route. Take a look at the US Courts website (Here) as it gives some good descriptions of what you can and cannot do.

    Whilst I am always against people not paying off their debts, I am fully behind a small business owner using the laws of the land to avoid personal meltdown.

    One thing to think about is the possibility of you wanting to start another business in the future, if so, make sure you protect your credit score.
     
  3. Primer

    Primer
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    Thank you Sean,

    I do still maintain a personal credit score of 770. At this point I'm not sure I care about starting another business. It is going to be a huge uphill climb to eliminate that much debt...
     
  4. Adam

    Adam
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    If you feel that your business could still be liable and fend for itself, then still keep too it and soon you will be able to reapt the benifits, however as i see from what you have wrote then it looses money.

    You could always do a last minute plee in order to gain business from clients. Offer discounts to people you already have as you will gain their trust as a customer. This would appeal to many and you will find that many people will come back to you rather then competitors if you are that little bit cheaper.

    If this does not work, then you would obviously have to re-think and make sure that the right decision is made at the end of the day. Bankruptcy must be a last option, so consider everything else rather then bankrupcy first. Once you get into bankrupcy or adminstration then there is no-where back although you are paid/bailed out.
     

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