Business Bankruptcy Law | Small Business Bankruptcy Laws

My mom is thinking about filing for bankruptcy since she’s up to her eyeballs in credit card debt, not to mention a debt that my dad incurred that he now owes money to the IRS and money on a judgment against them for a small business that failed a couple years ago. I don’t know all the details, but that’s the gist of it. So her question is whether or not the bankruptcy will affect what she owes on both the judgment and to the IRS? I guess getting rid of her credit cards will allow her to pay the judgment and IRS off quicker if they aren’t affected by bankruptcy, but she was just wondering because she is thinking about trying to file for bankruptcy on her own because she obviously can’t afford a lawyer.

I have no one to talk to about my situation, not even my best friends and family. This is a very private decision.

However, I need to know if I am thinking clearly and would so appreciate your help.

When the economy collapsed, so did our business. One year later and we are still living off of savings, depleting our retirement accounts just to stay alive. While I certainly realize that we were at least lucky enough to have this to fall back on, we are in our mid 50’s and this money is what we planned to retire on. Couple that with ,000 in credit card debt that has been incurred to pay our vendors when the business went down, by trying to do the right thing and not filing for bankruptcy, and this has taken a tremendous toll.

We have a differing opinion about how to move forward. I want to sell our home, in which we have significant equity, and move into a smaller, more modest home. The problem for my husband is that this is our dream home, a 3000 sq ft home we built 5 years ago and planned to live the rest of our lives in. I hope I don’t sound too obnoxious when I say it is a very beautiful home.

Of course we won’t get out of the home what we have into it, cash wise. We will be taking a pretty big loss because property values have dropped. I don’t care. While I WANT to live in this home, I don’t NEED to live in this home. My husband is not budging, and is content to spend what we have saved until the business can get going again. When………I have no clue. It’s not looking good.

I am so afraid to lose everything that we have worked so hard for these past 20 years. And if we continue on this path, we will.

I want to sell the house, restock the 401K to where it was, pay off all our credit card debt and purchase a more modest home.

He wants to stay in the house, use our saving to live with hopes that the business will come back.

I feel so desperate that I am thinking of filing for divorce so that I can at least protect my half of what’s left, forcing the sale of the home. I NEED that security. I can not live, hoping that things will turn around while watching every last cent of our retirement go to pay interest payments.

We have been to counseling for weeks now and he is still not giving. We have one HS child left at home. This would devastate our family, but I need that security.

Am I being unreasonable?

Thank you.
He is the one that wants to keep the "material" thing (the home), not me.

I want the security.

I am not trying to "recoup" cash. I want to take the cash to pay the bills we have racked up, buy a smaller home (smaller home, lower bills) and go from there.
I am not trying to "recoup" cash. I want to take the cash to pay the bills we have racked up, buy a smaller home (smaller home, lower bills) and go from there.
Mikey, We have a financial adviser and he is with me.

Here are the details of our divorce:

We have only been married three years. I own the house in my name only, which I bought six months before we got married.

We have no children.

She left me and abandoned me. She cheated on me. The state where I live is a no-fault divorce state. (Contrary to my username, I don’t live in California.)

We are nearly broke now. I have tons of credit card debt now as I tried to start a small business and haven’t had much income for a while now. The credit card debt was run up by both of us, as most of the debt is a result of not having enough income. About ,000 of the debt is hers from a previous credit card. About ,000 is from my business. There is a lot more credit card debt from both of us.

If things continue as they have been, I’ll wind up in bankruptcy and foreclosure in about a year. I recently went back to work full-time, and I am trying to make enough money to continue paying the mortgage every month.

If I hire an expensive attorney, I’ll wind up in bankruptcy from all of the attorney fees.

If we can keep things agreeable, then I think we might be able to file a cheap divorce and just get it over with.

I’m fine taking on the debt if I don’t have to short sale my home or foreclose on the home.

I found out recently that my wife was hiding some money in another bank account from a 401K from her old job. It was roughly 00. I never saw this money until we lost 0 in our tax return this year from paying taxes on it. My wife also ran up thousands of dollars in prescription drug bills and medical procedures she didn’t need.

Our finances are still joined right now with a joint bank account and one credit card.

While I think she should be stuck with some of the debt, I would rather just get it over with. She has nearly destroyed my life and almost completely destroyed our finances.

What do you think? Should I hire a lawyer and go after her, or just try to be amicable and get out as fast as I can? What liabilities may I be subjecting myself to if we try to do it cheap?
I’ve heard you can’t close a joint checking account if both people aren’t there together.

Hi, I owned a business a few years ago and it went belly up. I was forced to close shop and was left with major debt to deal with. I settled some of my business credit cards, but my current situation is:
- I have a small business administration loan (SBA) for 0,000. They got a judgment against me and I’m trying to work out a payment arrangement with them
- I own four houses but they all have liens on them from the SBA
- I have 30-50k in credit card debt
- I owe k in taxes to uncle sam
- I owe about k in property taxes

So, all in all, everything is great. What I’m looking for is help on how to find a trustworthy person/company to work with to help me through my possible options, but bankruptcy to other measures. It’s so hard to find people online who aren’t trying to swindle you. Any help you can offer for finding the right people or even the right category of person would be greatly appreciated. Not sure whether I should be going to a lawyer or financial adviser or some combination.

thanks!
I love how the first response is for what undoubtedly is a scam. Thanks!

I have about 000 in unsecured credit card debt spread out over 9 credit cards (BofA, Citi, Mrk, WFG, Chase, Dell, Macys, Target). Why this much? I was dumb and stupid and have no sense of money management but was also married and made some bad business investments. I am now divorced. Majority are now at penalty interest rate!!!

OK so I have everything on a payment plan (except WFG that is soon to charge off) but here lies the issue. I have zero savings and my FICO score has already dropped to 475. The home bills (mortgage, utilities & vehicle) takes more than half my monthly income. My biggest concern and fear is that I have my first child coming this December and don’t want her to suffer due to Dad’s mistakes. My girlfriend has her own financial issue with the IRS for almost same amount as my debt, so I do not get help from her and I can’t help her own issues. But I need to start paying the hospital bills from the new baby, and the mom needs come break too.

Please advice:
1) Should I cut and run for the next 3-5 years and settle these debts later? Build a savings right now for the baby and her mom too. I am pretty confident I can take care of it later down the line. Maybe save up then start approaching them one by one (in about 12-15 months) and offer lump settlements.
2) Should I file for chapter 13 and get a court’s help on repayment; thereby reducing some of the outrageous fees and interest?
3) Should I go for those special payment plans with companies you see on TV? I have seen more negative comments than positive regarding this option

Any advice is appreciated and feel free to criticize my past actions. I can only learn going forward. Before I didn’t care but now I have this lady and kid, and they both take priority so I feel I should change the situation fast.
FYI, I am no longer using them for new purchases. Its just I ignored them for a while when I was going through the divorce proceedings and changing jobs which resulted in the high penalties I am facing. I have tried in the last 90 days to put everything on a fixed budget through payment plans but other issues and medical bills keep coming up. So far the medical bills have not been paid and are at 00 total; and the baby is still to arrive in December.
To sophieb & Timothy P,

thanks for the advice, I am reviewing the best option going forward.

Sopheid, a little more details: It is my first child and we are not married yet due to the IRS issue. Yes it was poor planning but I am happy I am having a baby finally; after trying for more than 5 years and divorcing for reasons connected to that.

I will explore the option you mentioned. Current salary is K which I just started last 2 months, about k monthly after taxes. Like I mentioned Mortgage (GF house!) and utilities and transportation is consuming about 00. My GF is helping as much as she can, but she makes less than half my income and has 1 kid already.

My issue is that, regardless of all being on a payment plan except for 1, the debts are not reducing. I feel strongly I need to start saving for medical bills and baby’s arrival and do not have the room currently to do so. This is why I am exploring alternative options.

Senator McCain has voted ‘NO’ to all of these issues when they came up for vote before the senate. Does the public really know his voting record? (Obama voted ‘Yes’) Information is from the US Senate website.
1.To provide safeguards for communications involving persons inside the United States
2.To strike the provisions providing immunity from civil liability to electronic communication service providers for certain assistance provided to the Government.
3.To provide a statement of the exclusive means by which electronic surveillance and interception of certain communications may be conducted.
4.To provide safeguards for communications involving persons inside the United States.
5.A bill to provide collective bargaining rights for public safety officers employed by States or their political subdivisions.
6.To protect service members and veterans from means testing in bankruptcy, to disallow certain claims by lenders charging usurious interest rates to service members, and to allow service members to exempt property based on the law of the State of their premilitary residence.
7.To provide a homestead floor for the elderly.
8.To require enhanced disclosure to consumers regarding the consequences of making only minimum required payments in the repayment of credit card debt, and for other purposes.
9.To exempt debtors whose financial problems were caused by serious medical problems from means testing.
10.To provide protection for medical debt homeowners.
11.To preserve existing bankruptcy protections for individuals experiencing economic distress as caregivers to ill or disabled family members.
12.To exempt debtors from means testing if their financial problems were caused by identity theft
13.To discourage predatory lending practices.
14.To protect employees and retirees from corporate practices that deprive them of their earnings and retirement savings when a business files for bankruptcy.
15.To amend the Fair Labor Standards Act of 1938 to provide for an increase in the Federal minimum wage
16.To clarify that the means test does not apply to debtors below median income.
17.To exempt debtors whose financial problems were caused by failure to receive alimony or child support, or both, from means testing.
18.To limit claims in bankruptcy by certain unsecured creditors.
19.To restore funding for education programs that are cut and reduce debt by closing corporate tax loopholes.
20.To ensure that 75-year solvency has been restored to Social Security before Congress considers new deficit-financed legislation that would increase mandatory spending or cut taxes.
21.To express the sense of the Senate that Congress should reject any Social Security plan that requires deep benefit cuts or a massive increase in debt.
22.To protect the American people from terrorist attacks by providing the necessary resources to our firefighters, police, EMS workers and other first-responders by restoring ,626 billion in cuts to first-responder programs.
23.To increase veterans medical care by .8 billion in 2006.
24.To create a reserve fund for the establishment of a Bipartisan Medicaid Commission to consider and recommend appropriate reforms to the Medicaid program, and to strike Medicaid cuts to protect states and vulnerable populations
25.To repeal the tax subsidy for certain domestic companies which move manufacturing operations and American jobs offshore.
26.To protect the American people from terrorist attacks by restoring 5 million in cuts to vital first-responder programs in the Department of Homeland Security, including the State Homeland Security Grant program, by providing 0 million for port security grants and by providing 0 million for 1,000 new border patrol agents
27.To expand access to preventive health care services that reduce unintended pregnancy (including teen pregnancy), reduce the number of abortions, and improve access to women’s health care.
28.To promote innovation and U.S. competitiveness by expressing the sense of the Senate urging the Senate Committee on Appropriations to make efforts to fund the Advanced Technology Program, which supports industry-led research and development of cutting-edge technologies with broad commercial potential and societal benefits.
29.To increase funding for border security
30.To eliminate methyl tertiary butyl ether from the United States fuel supply, to increase production and use of renewable fuel, and to increase the Nation’s energy independence
31.To improve the energy security of the United States and reduce United States dependence on foreign oil imports by 40 percent by 2025.
32.To provide additional funding for medical services provided by the Veterans Health Administration
33.To fund urgent priorities for our Nation’s firefighters, law enforcement personnel, emergency medical personnel, and all Americans by reducing the tax breaks for individuals with annual incomes in excess of million.
34.To provide an additional 0,000,000 for each of fiscal years 2006 through 2010, to be used for readjustment counseling, related mental health services, and treatment and rehabilitative services for veterans with mental illness, post-traumatic stress disorder, or substance use disorder.
35.To improve the Federal Trade Commission’s ability to protect consumers from price-gouging during energy emergencies, and for other purposes.
36.To provide additional funding for the Drug-Free Schools and Communities Act of 1986 and to provide activities for latchkey children.

I have a ton of credit card debt due to divorce, unemployed;credit in toilet; need to file bankruptcy but…I dont even have the money to do that; I have a 2004 cherokee and dont owe anything on it and would take a loan on it to pay bills and get the money to file bankruptcy but dont know if I am allowed to do that; i am unemployed right now; last year i made nothing basically; have no idea how i have even made it; stopped using credit cards nine months ago; what can i do; the grand cherokee is worth like 7 to 8k it only has 55k miles on it; i just dont know what to do; i want to just get my bankrputcy out of the way; a year ago my life was perfect now its in the toilet; barely even getting by; on food stamps; severely depressed; my precription is like 200 dollars a month and now i cant even pay that; i am 36 and make no money and have not for a long time; have no idea if there is anything out there that will help me; i put in applications and resumes in all day long; its so frustrating; now without my script i will be even more depressed and things will only get worse; i wish there was some short term presription help; my doctor charges 50 dollars a visit and i am down one payment with him; if anyone knows about bankrputy or what i can do; i dont want to get one of those 1 month loans and pay 300 screw that; i cant lose my car; plus i dont even know if you can do that when you are about to file bankrputcy i just dont know what to do anymore anyone with advice and not some stupid spam also i have a mortgage on a small condo and am not behind yet because i have a roommate; last year my brother killed himself; my best friend died a month after that and my wife cheated on me and got pregnant and i got divorced; its like can anything good happen; i have never collected any unemployment because i started my own business so i was self employed; i just dont know
i looked into gettng low income but unless your house is in foreclosure or your car is in foreclosure than they wont help you no matter how low your income is; your house or car has to be in foreclosure or about to get your car reposessed for legal aid to do it and i would have no idea on how to file bankrpuctcy; i have no idea

I own a small business and have over k in credit card debt but don’t make enough to service the debt. Will I be forced to liquidate the business to satisfy the debt?

Thank you for taking the time to read my question. My wife and I have been married for 3 years, been together for 7 years. We have 3 small boys ages 1,3 and 5. I have been in jail (3 times) due to my wife calling on Domestic Violence, every time she was either pregnant in the last trimester, or after the birth of one of our boys, all cases were dismissed with prejudice against her. I never hurt or harmed her, she just went crazy. Twice she was intoxicated on wine, but the police took me away, because I am the man and she was pregnant.
In 2005 we started a small seafood business, she quit her job which had great Benefits (Starbucks) I asked her not too because of the burden of health insurance on a small business, we did great to start, but she insisted on overpaying us out of the company, also she wanted to buy a house so we also purchased a home 2 months into our new business. I was trying to make her happy. Since then our relationship went downhill, this is where I started feeling hopeless with our relationship, although I went through the court system and jail, I forgave and told myself to hold the family together.
In summer 2007 the money in company ran out and she told me that she wanted to separate, she took the kids and moved to her mothers home, I ended up having to file a chapter 7 personally, due to no money and Credit Card debt above 25000 dollars, I also have decided to surrender my home, because I can’t make the mortgage.

Currently, she is going to counseling for herself, I feel alienated because when I ask about ‘us’ the family and she and I, she says that she does not know. She moved out at the end of August, and she has not done anything for the sake of the family, but only for herself, I have talked to my parents about it and they want me to divorce her, they believe that sometime along the way of our lives, she decided that she just wanted a meal ticket, they want me to find someone that will work with me and love me.
Another important point I want to make is that my parents invested 20K, and her grandfather invested 50k into the company, this is how she and we maintained the lifestyle that is now falling apart. In the bankruptcy I listed my parents and her grandfather for protection. Recently she told me that we need to pay her grandfather back, but no mention of paying my parents, I wrote a letter to her grandparents wanting to know what the situation was with the loan they gave my wife, but they have not answered back. My wife wants me to pay her 500 per month for the next 6 years to pay back this loan, I don’t believe her, especially now without an answer to my letter sent to her grandparents. I feel that she is holding the relationship hostage to get her way.

Should I move on, I am only 37, I think that she has some mental and emotional issues, that only she can work on, I also feel used, I mean she left me right when all the money ran out, and left me to fix it.

I have written letters to her letting her know that I love her with no response.

My friends say that she has turned into a gold digger.

I need some arbitrary advice on this…

The short story is that after a failed business, my home was lost to foreclosure, several bills mounted and I now have a means to payback debt. The other day I was successful at obtaining an agreement to pay a month on a 5k balance and it is my hope I can manage to do so with all of my debts. The monster in the closet is a 20k equity loan that was secured by my home which has no longer mine. When I approached the office I would typically make my payment to they gave me the number for the collections department and before I could even reach them DCS (collection agency) contacted me. Now I have told them that I would like to begin making payments but with my other debts that I am trying to honor being added on to monthly expenses, the old payment on the equity loan (250/mo) is pretty tough to manage. Is it possible to negotiate with these people? They offered a settlement of 13k on the 20k loan but I dont have that kind of money. I had actually hoped to go through the same company I had the loan with perhaps get it back in good standing in hopes that it would eventually help me to recover my credit status after being rocked by the foreclosure. any thoughts? I want to avoid bankruptcy, heck I think after I get my taxes back it would put me over the Median income for my small family of just my son and I anyway. Not sure what to think about chapter 13 either.
Update….Debt consolidation loans are out of the question due to lack of credit score. The debt is not credit card debt though it seems like everyone wants to help people out of credit card trouble. It’s utilities, a couple business debts and the dang equity loan. I need a dependable car and have to use the income tax to buy one. If I buy a decent used car I can lose it to bankruptcy, if I go chapter 13 it seems like I have to live how the court tells me to live and would have no money beyond living expense and with a 9 year old child to raise that is impossible.

I just found out I owe roughly between ,000 to ,000 in state and federal income taxes for 2006 from a failed business venture. I checked this with an accountant, and I definitely owe the taxes. The company already filed it’s return and my K-1, showing I had the income, so the IRS theoretically knows about it. I’m 24, have no assets or property, already have ,000 in credit card debt, and have been unemployed for over seven months. I’m starting a job next month that will pay me ,900 a month, so I was excited to get back on my feet. But I’m worried that paying off the IRS debt in installments will wreck me and ruin any chances I have to save up.

1) If I set up a payment arrangement, how much should I expect to pay per month, and for how long?
2)I haven’t filed my return yet (got extension). How long b4 IRS comes after me?
3)What happens (realistically) if I ignore it? Could I claim Chapter 7 to erase it (making only ,000 a year)?

I really need realistic advice here.Thanks!

My dad has a large credit card debt (mostly from my mother’s illness before her death… years ago) and has recently been forced to retire due to his small business failing. The business had no assets (no equipment no owned buildings, etc.) and basically no longer exists in any form. He does not own a home or have a mortgage. The only thing he does own is an old car, really. His bank account is at 0 right now.

He has recently moved in with me. I own my home (well, paying a mortgage, anyway) and have about ,000 in my bank account right now.

Anyway, to make that short, there is no way he can pay off the credit card debt and I’m just wondering what in the world is going to happen with it.

Is there any danger that when he can’t pay it or declares bankruptcy, they’ll come after me?

My brother owns and operates a small mechanics shop that caters to race cars and making strret cars ready for racing. He has owned the business for 5 years but is barely making ends meet. He has taken out a second mortage and has obtained about 25k of credit card debt. This is his dream job and loves it and the business is good but he just can’t seem to get ahead and now the debts are pilling up and his luck is running out. Are their government grants, free monies or any advise you can give to help him keep his business, pay off his debts AND feed his family? I have looked at how to stave off the creditors but have come up with little. I know about consolidation but not sure how much this will help in keeping the business! Any advise would be cherished and welcomed. Bankruptcy is not really an option, at least not yet! Thank you for an advise or help!

The situation is that this person’s vehicle has already been repossessed, but has equity in the home. Wants to move out of state. Has around 50K in credit card debt. Is partner in a business. Has a separate full time job. I’m trying to understand why this person would say their lawyer/adviser suggested that they quit their full-time job and work with the business partner?
the person who is preparing to file bankruptcy used to be romantic partners with her business partner, and it seems she isn’t letting go so easy. If lowering her income allows her to declare bankruptcy, in what ways can her declaration impact their business?

My old boss recently filed bankruptcy for his business and person. He says that his wife was just served with 2 lawsuits. Another employee is suing him and the company for wages and expenses and has named her as his wife. Also a credit card company is suing her as his wife saying that his credit card debt is hers because of community property law in Arizona.

As I have just started my own business I was concerned as to the legality and how to protect my wife if things go badly in my new business.

I have about 25k in credit card debt. Use to be about 9500 but after 10 years they are all judgments and with all the interest and fees its about 25k now. About a year and a half ago i had a really nice job was making decent money. I saved about 9000$ so i can try to pay my debt off. Originally on average i owed about 2500 to each of the credit cards i had. I got all my info together and called each of them to try to set up a plan so i could pay them off. Right now discover says i owe about 7k originally 3k, and city says i owe 6.5k originally 2.4k, washington is now about 4.5k originally 1.8k those 3 are my highest and all three wouldn’t agree for nothing lower then what they say i owe. all others agreed to a very nice settlement. I offered discover 4.5k , city 4k, and Washington about 2.5k to settle. Washington accepted 3k. but city and discover gave me a no and said that if i didn’t have the full amount they would just garnish my checks till its paid in full. At the time i was off work because my back started to give in. I had the doctor take some x rays and she told me that i had to take physical therapy for my back and should stay away from heavy lifting. Which means i cant do my job no more. So now i am unemployed and well luckily i still had that 9k i saved. Well now i am just fed up with them. I already ran out of money and my brothers and sisters are supporting me and i want to just file for bankruptcy and go to school and get my self a degree in business. Does anyone have any advise you can give me. Thanks in advance.

I also forgot to put this in. My brother was going to help me before when i was working he was willing to put in about 3k on top of my 9k so i could get out of debt. But now hes also low on funds and well i just decided to file for bankruptcy and hes willing to help me pay a lawyer for the process.

Also I am not really worried about the credit score part, i have 6 sisters and 3 brothers and well i learned my lesson and i made sure they learned from my mistakes and they are really thankful for my advise about credit cards lol and bank loans. They all have almost perfect credit scores and i had a big hand in getting them there. My sister offered me a position in a business she is opening and all i have to do is go to school for the position. She was actually the one that tried to negotiate with the credit card company’s on my behalf and she just told me to file since they wont accept a settlement.

I just want to see how many options are available for a situation like this. So i am open for any suggestions, advise, ect… from respectful people who can understand the situation. If you want to criticize, go right ahead too lol I want to here all your opinions.

The funniest part about this is they all want to settle now that i have no money. LOL I just think thats really funny.
hehe ya i already knew about that but i am safe from that too because my sister owns about 3 businesses and she is willing to offer me a marketing position. I am really good at it too i have been helping her with allot so i just want to get a degree in that field and go work for her.

My uncle is thinking about declaring bankruptcy, but the thing is that he doesn’t have very much credit card debt. I don’t even think he has 1 credit card.. He doesn’t have a checking or savings account either. He only owes wood companies for wood purchased because he owns a carpentry business. He also owes his employees a few thousand, as well as a few of his friends. Also, they owe his son’s school a few thousand because he used to go to private school. I know they’re in bad shape, but I don’t think bankruptcy can take away these debts.. Might I be right? Thanks..
Oh, also forgot to mention that he owes several thousand in back taxes.

I was divorced last fall, in Texas, where I still reside. My attorney refused to ask my x for disclosure, so I did not know that my x had ,000 in credit card debt. The divorce papers say she’s liable for debts she incurred from the day I walked out on her, and for all debts that are in her name, which these 3 revolving accounts are. But, she hasn’t paid and yesterday, after getting turned down for credit, I checked my credit online and found out that two of her credit card companies have put charge-offs on my credit, a third one is about to, because she’s 190 days past due on it, and she never paid the phone bill so Embarq has put a charge-off on my credit, too, for 0, which is the least of my worries, but my credit score is barely over 400 now. Everything else on my credit shows "paid on time/as agreed". I’ve never made a late payment on anything my whole life.

I’m considering bankruptcy, but I own two homes (one is a rent house, both are mobile homes). The industry I work in is winding down and I had planned on moving into the landlord business. I’d planned to purchase an RV park, not only as a new career, but as my only retirement income, as well. I’ll be 50 years old in a few months. I don’t have years left over to build more credit.
Suing my x for whatever she owes me will not do any good, because she refuses to work, doesn’t have a job skill and will surely never pay me once I win in court.
My income is excellent, and I may make too much for Chapter 7. Also, one of my homes is in a mobile home park inside a city limits. My main home sits on 2 acres in a subdivision, outside of city limits. I’m concerned that if I file bankruptcy, I won’t be able to keep both houses. I also have two cars. One is a junker that my X trashed and gave back to me while the divorce was still pending. I owe less than ,000 on it. The other car is very nice, only 2 years old, and I owe a lot on it. I’m paying on all this, on time. My only concern is losing my homes and the good car.
Personally, I have no other bills besides the two house payments and the two car payments & their insurance. I have no revolving accounts.
Given my plans for retirement and my unsteady job security right now, which do you think I should do, file or consolidate just her bad bills and pay them off over time?

I have recently lost my job after being in the telecommunications industry for ten years. I have had no luck finding a new 9-5 job with a regular salary. I have been forced to take a job full time at a restaurant.

I have over ,000 in credit card debt most with APR’s in the high 20’s. I have done my best over the last 6 months to keep up with my minimum payments but am finding it impossible recently to balance my debt along with my living expenses. By living expense, I do mean the bare minimums. Rent,utilities, gas, food etc.. I have not wasted funds on entertainment or purchases other than does required for work.

I had an hour long conversation today with a debt consolidation company. It is has been in business since 1965 and is non-profit. I actually used their services in the past to consolidate debt that I managed to pay off about 8 years ago. They analyzed all of my assets, income, debt and overall financial situation. They determined that I was running at a 65% deficit between what I am brining in and what I owe. They recommended that, although it may sound harsh, my best option was to file for bankruptcy. They determined that I would not be able to keep up with any type of repayment schedule that they would negotiate with the banks and that a fresh start may be my best option.

I have avoided the thought of filing for bankruptcy in the past for several reasons. But now that my income is at an all time low and my job prospects do not seem to be sorting themselves out in the near future, I do not now what other options I have available to me. Needless to say, the stress of the whole situation has been making life extremely unpleasant.

I am single, have no kids, and will not be purchasing a house in the near future. The only asset I own, is an 8 year old car.

I have five questions:

1) Other than having a bankruptcy ruling on my file for the next ten years and not being able to secure credit, what are the other disadvantages of filing for bankruptcy?

2) I do not have disposable income. I am making enough to pay for essentials. Would my chances of having the entire debt excused be good? Or would I still be responsible for paying a percentage?

3) I know from my corporate experience that my credit file would be reviewed during the job applications process. I am considering a career with the Federal Government. How would a bankruptcy ruling be looked upon by the government during the job application process?

4) How much with a reputable bankruptcy lawyer cost me?

5) I have also read that another option is to do nothing and ignore my creditors. The following excerpt below is from http://bankruptcy.findlaw.com/ . Is this plausible?

Do Nothing
Surprisingly, the best approach for some people deeply in debt is to take no action at all. If you’re living simply, with little income and property, and look forward to a similar life in the future, you may be what’s known as "judgment proof." This means that anyone who sues you and obtains a court judgment won’t be able to collect from you simply because you don’t have anything they can legally take. (As a famous song of the 1970s said, "freedom’s just another word for nothing left to lose.")

Except in unusual situations (being a tax protester or willfully failing to pay child support) you can’t be thrown in jail for not paying your debts. Nor can a creditor take away such essentials as basic clothing, ordinary household furnishings, personal effects, food, or Social Security, unemployment, or public assistance benefits.

So, if you don’t anticipate having a steady income or property a creditor could grab, bankruptcy is probably not necessary. Your creditors probably won’t sue you, because it’s unlikely they could collect the judgment. Instead, they’ll simply write off your debt and treat it as a deductible business loss for income tax purposes. In several years, the debt will become legally uncollectible. And in seven years, the debt will come off your credit record.

I am planning on contacting a bankruptcy lawyer for further advice but wanted to get an idea as to what I am dealing with before I further the process.

I appreciate any feedback the Yahoo community is able to provide!

Thank you in advance!!

I have a small business… sole proprietorship…. i’m having to file personal bankruptcy…mostly credit card debt and medical bills. Can I protect my business assets (my computers and some other stuff are exempt under Ch 7, but not office furniture which exceeds the personal exemption) if i convert it to a corporation a few months before filing?