jimdiamond Posted October 5, 2010 Report Share Posted October 5, 2010 We have first meeting with bk attorney here in illinois. we own a small business, we are owners 50/50. my wife and I. her debt is overwhelming us, and she hasnt paid her credit cards in many months. her total debt is well over 100k, including student loans. credit cards are easily 50k in debt. i have about 15k in debt, mostly one major cc with us bank. ive missed some payments, and have some collections on my report, but for small stuff. few hundred bucks, etc so my credit is nowhere near perfect.anyway. my question is this:how does filing BK affect your business? we only pay ourselves just enough to pay rent, food, gas, and what bills we do pay. other than that the money stays in the business account. we were given a large sum to use for the business start up.will we lose the business if my wife files? will i have to also? im pretty sure based on our lack of income, vs our bills we qualify, but would hate to lose the business too. we are owners 50/50any info you can provide prior to our meeting thurs is appreciated, thanks Link to comment Share on other sites More sharing options...
WhoCares1000 Posted October 6, 2010 Report Share Posted October 6, 2010 If your wife is the only one that files, then as a partner in the business, 50% of the assets are hers and hence become part of the BK estate for the trustee to deal with. This includes all business cash accounts, accounts receivables, business assets, etc. If you cannot exempt the assets, then the trustee could force the selling of the business in order to use your wife's half to pay her creditors.The BK attorney should be able to explain to you either what you would need to do to protect the assets (for example, maybe a large draw down to pay the BK fees or maybe pay your car insurance ahead) or even if BK it right for your situation. Link to comment Share on other sites More sharing options...
jimdiamond Posted October 6, 2010 Author Report Share Posted October 6, 2010 thanks for the info, hope it doesnt come to that, im sure there are options. our business is our baby, I guess that is why there is a first consultation with the attorney to assess our situation. Its just ridiculous how much cc debt she incurred, large portion of it was utilized for her education, we also used it to get through the "rough patches" of no income when our jobs came to screeching halt. we were in sales. also, used alot of it for biz start up. thank god we had that, or we would been really bad off, so anyway..thanks for your help. Link to comment Share on other sites More sharing options...
DCusr Posted October 6, 2010 Report Share Posted October 6, 2010 Does anybody know if an alleged bus card debt or similar would require a separate bk for bus if you file a ch7 and you are a sole proprietor? Link to comment Share on other sites More sharing options...
MrMarshall Posted October 6, 2010 Report Share Posted October 6, 2010 (edited) Jimdiamond, is the business making any money? Honestly, there are to many variables to answer your question. I'm sure your attorney will ask about all your assests,debts to prequalify you. Our office asked very specific questions about assets, property, income, debt over the phone to prequalify bankruptcy chapter 7. If your married and she is filing alone, she will have to add your income information. Your attorney will tell you your best options and what chaper to file. good luck. let us know what your attorney said.DCusr, you have to list your business in your bankruptcy. Is your business still operating? gl Edited October 6, 2010 by MrMarshall Link to comment Share on other sites More sharing options...
DCusr Posted October 6, 2010 Report Share Posted October 6, 2010 If bus was still operational would that force a liquidation/closure? If bus was closed I assume it wouldn't make alot of difference. I find the bus thing confusing because if you are personally responsible I don't see how it matters whether it is for a bus or not, maybe to the irs in some cases. However, if an alleged debt has bus name, but you are personally responsible and claiming ch7 individually seems like it would be included. As a "sole" essentially the individual is the business. Link to comment Share on other sites More sharing options...
jimdiamond Posted October 7, 2010 Author Report Share Posted October 7, 2010 is our biz making money? good question, according to our tax returns NOPE its not. we are not retail or online with products. so i guess it comes down to our meeting today, so many different scenerios for every situation, so, will let you know. thanks everyone Link to comment Share on other sites More sharing options...
jimdiamond Posted October 7, 2010 Author Report Share Posted October 7, 2010 we go have 30k sitting in the biz account though, we were given start up money about 6 months ago and put it in the bank account, hope they dont want that??!! this sucks so what if we just ignored and blew off all the creditors, they would come after her for judgements, and just make life miserable wouldnt they? also, how about 13? or maybe a REPUTABLE debt consolidation company, something..but we really dont want to, and cant pay these bills, not with baby on the way. Link to comment Share on other sites More sharing options...
Denita Posted October 16, 2010 Report Share Posted October 16, 2010 Explore a Ch 13 with a good BK attorney. Make sure the attorney is well versed in Ch 13's and in small business filings/personal filings with small business owners. The BK attorney's specialize - not all of them 'do' Ch 13's well. Yes, the $30k sitting in the business account immediatly becomes an asset of the BK estate when you file a Ch 7. A Ch 13 can protect your assets and is a better repayment plan than a debt settlement co when you are speaking about large amounts of debt. Link to comment Share on other sites More sharing options...
esterlydsl1 Posted October 19, 2010 Report Share Posted October 19, 2010 It is going to be a little hectic for you, but the legalities are to be completed for filing the bankruptcy. Your wife will not be solely held responsible for the business, if you are also a part of it. Now, you will have to request your attorney to clear the things to you and to the court and ask for exemptions. Link to comment Share on other sites More sharing options...
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