Business Bankruptcy Law | Small Business Bankruptcy Laws

I have a small LLC with only a couple employees. One of my (now ex) employees had a company credit card that was in my business’ name, that he used to rack up thousands of dollars in personal debts. He has disappeared and I have no way to find him or repay his debts. What avenues does the credit card company have to recoup this debt? Can they come after me, since I am the founder of the company (I figured they can’t since it’s a LLC)? My company is small and repaying the debt would pretty much put me permanently under. What impacts would filing bankruptcy have on my personhood or ability to create an LLC in the future? Would it even eliminate the debt?

Thanks in advance, I really appreciate the help.

…going to file bankruptcy soon.
My husband is going to buy a new car and is going to trade the car that has both our names on the title as "or". I have hired a lawyer to file bankruptcy for my business. My husband is not filing bankruptcy. Will this be considered fraud or what kind of problems will this cause if he trades this before the bankruptcy is started. When he buys a new car my name will not be on the title. Please let me know what to do. I will try to contact my lawyer next week to answer this but I will be crazy about this before then.

Only poor person files bankruptcy. And only large banks and credit card companies (which are rich) oppose bankruptcy. Whether a person is financially responsible or financially irresponsible, the government has NO business telling citizens how to spend. This is free country. We don’t want government interference in our lives. Republicans don’t preach their own mantra. This bankruptcy crackdown interferes into the lives of the lowest man of the ladder. Furthermore these bankruptcy laws don’t prevent people from filing bankruptcy. The bankruptcy lawyer industry is equally very large and they have all figured out numerous ways to get around tighter 2005 laws, which in effect defeated Bush efforts to make it harder. This is evident by the fact that 1.5 million filed chapter 7 last year, compared to less than a million prior to 2005 laws.
billysab: reported for violation and you will get email violation notice.
Also how can the government teach the citizens to spend responsibly when the government itself is a reckless spender? this puts GOP as hypocrites
Will: why should the government interfere and tell us how to live our lives? I thought that’s GOP slogan?
beltway 8: Lehmann brother was chapter 11. I meant to say only a poor files chapter 7.
if you’re filing bankruptcy you are poor. why else would you file it? You don’t have money to pay the bill — that technically makes you poor. FAIL
stratam: see above my comment for beltway 8. Lehmann brother was chapter 11. I meant to say only a poor files chapter 7. The bankruptcy laws cracked down on chapter 7, not chapter 11
did lehmann file chapter 7? who files chapter 7? ordinary people like me and you! that’s what the law targeted. Poor people file chapter 7.
TOP DOG: yes, what happened to personal responsibility? Government itself being financially reckless is giving financial advise to the common citizen?
beltway and strat: FAIL. You never followed up to my additional details. Post and run

I’ll leave out the details but I am almost certainly going to file. Already spoken to 3 lawyers and picked one. Would like to hear from folks whov’e been through this in the past. I’m curious what "life is like" after it’s all said and done. Do you have regrets? I never in a million years thought I would be ever filing bankruptcy but I started a side business 6 years ago and it’s failed in this economy. And I’ve spent every penny I had saved up.

I’ve been told after it’s discharged, you will be able to get a loan to say, buy a car within 6 months? And a mortgage within a year? (I need to re-fil my home on the lower rates).

Thanks in advance.

I own a beauty salon for about 6 months and every month i have to put out my own pocket money to pay the business bills. I’m about to have more trouble on the way paying my mortgage…My landlord said I can’t advertise with car’s flyer, no banner, no street sign, building is in the back of the plaza behind a tree and my lease is 5 years…I’ve tried negotiate with the landlord but failed do anything. I’ve made a very bad choice choosing this location. Is there anything i can do to break this lease? I want to avoid filing bankruptcy, i want to see if i can find a loophole to cancel this lease, and where can i find the right people to help me? Real Estate lawyer or Contract Lawyer? and how do i find out about their reputation? PLEASE HELP!

…going to file bankruptcy soon.
My husband is going to buy a new car and is going to trade the car that has both our names on the title as "or". I have hired a lawyer to file bankruptcy for my business. My husband is not filing bankruptcy. Will this be considered fraud or what kind of problems will this cause if he trades this before the bankruptcy is started. When he buys a new car my name will not be on the title. Please let me know what to do. I will try to contact my lawyer next week to answer this but I will be crazy about this before then.

Your Question
getting a feel for time?
I am in a difficualt situation where my buisness has dropped by 70% in the past 18 months – followed the recession perfectly – I have had to lay off my entire staff but two remaining and we are trying to sell our building inorder to pay our corporate debts – of hwich I have 135K some on credit cards some on various loans. all are personall guaranteed. i listed the building 5 months ago and we just atarted to get some interest as the market is starting to warm up here in central texas. I am pretty sure it will sell by summer, I hope. if we can sell it, then all our debts are paid and I can either resume business in a much smaller fshion or close it down and start anew in a new career that is less subject to economic fluctuations. my question is; we stopped making payments on our AMEX card about 5 months ago because we cant make the 30 a month payment. there is a balance of K. does anyone have a feel for how quickly or what the timeline is for them to actually file suit locally? is there any strategy I can employ to get some more time? I am just trying to buy time until the building sells, so I can pay them and everyone else. If they file a suit against me, I dont see any option but to protect myself by filing bankruptcy.

in 2004 i bought a house and had it put on 2 acres of land that i owned out right for over 15 years, in 2008 the house burned down and was considered a total loss by the fire dept and the insurance adjuster, i sent the insurance proceeds to the mortgage company who has done nothing but give me the run around bouncing me from one dept to another, after nearly 18 months the mortgage company went to court and foreclosed on the property then 4 months later went back to court and had the foreclosure sale set aside, i have asked the mortgage holder to send me a statement of the total amount owed on the loan but they wont send me any thing in writing, when i asked for a statement saying they received the insurance proceeds they told me to write a letter requesting the information so their LEGAL DEPT could review it and decide if they could release the information to me. i had replacement insurance but would not rebuild because of the shitty way this company has done business with me. i have filed a complaint with the better business bureau the banking commissioner and the insurance commissioner in my state. we all know the banks do WTF they want to do without restraint that’s why our economy is so F$$$$D up, i don’t have the money to hire an attorney as it has taken all my every thing to try and put my life back together, i lost my job in december and im really struggling to get by with my son. Im beginning to get very depressed and would like to put this behind me so that i can move on with my life. if there is any one out there that can help me i would appreciate it and will pay you what i can. the attorneys that i have tried to talk to want hundreds of dollars just to talk to me then want thousands to help me. i tried filing bankruptcy but was told i needed the financial info concerning the mortgage the total on the loan was 90988 when the house burned down the insurance proceeds were 75000, but now with all the legal fees late fees and other bullshit i have no idea how much it is. i just know its a mess and all i do is cry, is there any one that can help me please!!!!!!!!!!!!!!!!!!!!!!!
HAD MORTGAGE INSURANCE THE ISSUE IS NOT THE LOAN THE ISSUE IS THE MORTGAGE COMPANY WONT PROCESS THE PAPERWORK NEEDED TO SETTLE THE CLAIM!!!!!! PLEASE PEOPLE NO MORE STUPID ANSWERS, IF YOU DONT HAVE ANYTHING USEFUL DONT ANSWER MY QUESTION. GOT ENOUGH BULL ALREADY. THANKS
THE COMPANY IS WELLS FARGO, I JUST WANTED TO KNOW WHAT THE BALANCE WAS ON THE LOAN AND HAS TRIED TO WORK OUT PAYMENT ARRANGEMENTS BUT I CANT BECAUSE THEY WONT GIVE ME ANY INFO,

I work for a small business. We found out that we might be going out of business if they didn’t find another buyer by the end of the month; but otherwise the owner will be filing bankruptcy. I don’t know the details, but apparently the bank "got wind" that they might be filing for it and froze their account. I’m in the state of IL for what it’s worth- we heard that once an account is ‘frozen’ it can’t be "un"frozen. We were supposed to be paid by 5pm Monday; and have not yet been paid today either. Without account access nobody can get their checks/money.
I *need* my paycheck.. how to employees in this situation get paid? I me, legally we HAVE to be paid. And there are still people working now.
not sure who/what to call or talk to about this or what has to happen. Won’t get further details until I work again which isn’t until Friday.

A friend of mine owns a small business and since he "sold" shares of the company to friends and family to raise money to open it, he filed the business as a Corporation C.

He is now horribly in debt because he did not balance his budget wisely, and he is planning on filing bankruptcy. He has not told any of the "shareholders" because he says when a Corporation C files bankruptcy the government and collectors cannot sell or reposess the shareholders personal finances and property to cover the Corporation’s debt, they can only go after the finances, stock and profits of the business to cover the debts.

Everyone else I have spoke with about this said he is full of BS and that if the business does fold and he files they will start selling off business stock and fixtures, and if that does not cover the debt they will start with the highest sharehold and work their way down until they get all of their money.

Which is true? Who is right?

~~ Abe

a medical office is filing bankruptcy. I want to know can you still operate your business and keep the building you are paying for?

My wife and I started a business 2 years ago and put everything from our savings and credit into it but it went under. We need to file Bk to get out from this debt and collection efforts but we did manage to keep our 401K accounts and not touch them for the business. Can we file BK and have our investment account not placed up for grabs? How about our car notes? Are there limits as to what one can have when filing bankruptcy? Would we still be liable for a portion of the debt because of Bush’s new law that went into effect last year? The total debt is less than 100K. Any information would be greatly appreciated and I will definitely pick the Best Answer.

Thanks!

Due to my ex-husband being a co-debtor on some medical bills for our 2 sons, he will be receiving a notice that I am filing bankruptcy. I do not want him to know my business because it’s his fault I’m having to file. He has to receive the notice by law since he is responsible for 1/2 of the medical bills (which he never pays). During the divorce he was ordered to pay on a credit card which my name was listed first. Well he never paid and know I’m being sued for k. I had no other options but to file for bankruptcy. I filed today and he will receive a notice and become privy to my filing for bankrupcty. I know he will call me and give me crap. I don’t want to deal with him. I would just like some good come back to say to him when I get the call!!!!!

Four of us have given 25K each to a business which is run by three people for last 2+ years and for past 9 months, they have stopped paying interest and now they are not giving our principal back. Two of three are filing bankruptcy. They have all given personal guarantees but now refusing to pay back. They claim that the business is closed and bank is after them as they have taken a huge mortgage. Please recommend some good collection attorneys and also advise alternatives.

I have a small business that I am closing and am filing bankruptcy for the LLC. Can my employees final 2 weeks of pay be included in a BK?

I need some insight on this. I met with a bankruptcy lawyer today to discuss my options with filing bankruptcy. My situation is that I incurred about K in personal credit for start up/capitol for a business started in Feb 2007. Business has been very slow the past 6 months and I am tapped out.The paralegal that assisted me said that I would not be able to file a chapter 7 b/c the debt was incurred in such a small amount of time (approx 17 months), and that I may be able to do a chapter 13. I am not opposed to doing a chapter 13, but has anyone heard/experienced this type of response? I am not wanting to abandon my financial obligations, but the fact of the matter is that I have no more credit to apply to carry the monthly commitments during this difficult economic time and getting rid of the cc debt may be the only way to keep my doors open and salvage it. I am just curious if I should go ahead a file a chapter 13 as instructed or get more opinions from others concerning a chapter 7. No bashing please, just wanting some sound opinions or suggestions! Thanks
I did go to a bankruptcy attorney office and a paralegal was the one who reviewed the info

I am filing Bankruptcy in about 3 more weeks; however a Writ of Garnishment (which states that I have to respond within 10 days) was pushed under my office door. It was not properly served.

I am self-employed and the economy has hit me hard. Besides not having the money to send, what can I do? Here are the ideas I have come up with:

1. Do Nothing. What will happen if I ignore the documents since they were not properly served?

2. Have my employee fill out the documents stating that she did get the Writ of Garnishment in the dropletbut since she does not owe me any wages, she cannot garnish them, and mail the signed documents back to the courts and the attorney.

3. Fill out the documents myself and show that my income is EXEMPT from garnishment since there is no disposable income left after the business liabilities are paid. Then return the documents without payment to the attorney?

4. Mail the blank documents back to the courts and the attorney with a letter written by my employee stating that they were not served properly and so she immediately returned them.

4. Or?

What should I do?
Yes I am a sole proprietor, and currently I am lucky if I bring ANYTHING home to my family. I am trying to ride the economy out because I have been in business 6 years and don’t want to see my hard work end up in the toilet.

The documents were pushed under the office door outside of business hours. You do not need a key to access the front door of the office where they were pushed.

I started financing a hyndai accent through chrysler financial in October 2008. I have paid on this loan every month since we started financing this vehicle. After Chrysler announced that they were filing bankruptcy we are still receiving our statements through Chrysler. Do I still have to pay this bill? If I do, what makes me entitled to pay this because in a small business bankruptcy, a client that received services doesn’t necessarily have to pay the small business filing the bankruptcy (example used, a family member’s business filed bankruptcy and was forced to close the doors). Why would another creditor or business want to take debt for the probable risk of losing more money, especially in this economy. Is there a way to get out of paying this possible debt or have the loan amount and payments lowered? Are there any perks in this situation?

I finally left when I couldn’t take his drinking anymore. He is in the house and he loves the house — he should have it. I am just wondering what would seem fair in a divorce settlement on it. I know he can’t borrow against it right now to pay me off, as we are in the midst of filing bankruptcy — but we have had the house for over 16 years and I am looking for something fair for both of us when it comes to the division of this property. Our kids are all grown and on their own so there is no child custody issues. We also own shares in a business together and I would like to see him keep half the shares. I would like to stay on his medical coverage but am not seeking any spousal support — even though he made 45,000.00 last year and I made less than 8,000.00 Is there a lawyer online that would be willing to advise me as I file my divorce online? I don’t have any additional money to actually obtain an attorney and I don’t want all the attorney costs. I just want my life back.
My children understand why I left, however, they do not understand why I want the divorce — since they don’t want to deal with the option that someday I may meet someone else…this is the attitude of my grown children. The call thier dad homer and say he is like a big brother to them.
My children understand why I left, however, they do not understand why I want the divorce — since they don’t want to deal with the option that someday I may meet someone else…this is the attitude of my grown children. The call thier dad homer and say he is like a big brother to them.

I am currently being sued in civil court, and have no money for an attorney, the case has gone on for a year now in federal court, and have basically lost my business because of all the time I’ve put into defending myself from something I did not do, and am being "lawyered" to death by 6 lawyers. Because of all this, even if I "would easily win" if I could afford an attorney, I will have to file bankruptcy (chapter 7 for me).

Therefore, relating to an ONGOING CIVIL case and a need to file BANKRUPTCY, here’s my QUESTIONS if you would please use the same numbering system to answer them so I can keep track (thanks thanks thanks):

I would LOVE it if filing the bankruptcy would END the case so I could go on with my life, find another job, build another company etc. I read a lot of yahoo answers and one said “If they haven’t gotten judgment against you … then your bankruptcy filing can and will stop the case.”, but I need to be sure.

1) is there any ADVANTAGE to me in filing bankruptcy BEFORE the judgment (now is preferred so that I can go on with my life which has been destroyed)?…. and what will opposition do if they know I’ve filed for bankruptcy? Will they attempt to continue the case when they know the bankruptcy will go thru? If so, why would they continue the case?

2) Since I’m going to be filing In advance" of the judgement, can I "claim" the "injuries" they haven’t yet enumerated " …on my petition for bankruptcy? …or do I just “list the case” and say “amount pending”? THANKS.

I know about the "automatic stay" (keeps creditors (I currently have NONE and a perfect credit score I’ve worked hard to build all my life) from coming after you etc).

3) After I file for bankruptcy (I know it takes so many months to go thru), these additional related questions, thanks:

3a) what happens to the current civil case?
3b) what do i tell the judge? Do i have to tell the judge or just inform the other side?
3c) will i still have to finish the case (expected one more year of my life)?
3d) if we’re currently in discovery, will it / can it stop discovery / subpoenas etc?
3e) ….or…does it just “suspend” the case until the b/k procedings are over? …or does the case just continue on in real-time?

Thanks so much for answering all of these "sub-parts" to my ‘compound" question. They’re really important to my life and my families lives.
Ryan K,

That was totally useless. I can’t believe you actually answered 195 other people. You’re a joke.