Business Bankruptcy Law | Small Business Bankruptcy Laws

For lack of a better term i was forced to take out a mortgage last year on my home that was paid for. The terms and percentages were awful but thats besides the point.

My income at the time was sufficent to pay my bills and the mortgage.

I ran a successful business for a little over two years until 4 months ago when things went downhill. My mortgage payment is more than most people make in my area in 2-3 paychecks and now im unemployed with a SMALL list of other monthly bills besides the mortgage. I do have about k in other unsecured debt from the business and other unsecured creditors from when i was young that i never took care of.

I have thought about bankruptcy, chapter 13 is a no-go mostly because i cant afford the mortgage payments now so why would i waste my time with a 13?Otherwise it could work,but otherwise i dont really need a bankruptcy if were not including the house mortgage because i could just set up monthly payments with my creditors at a small payment.
7 minutes ago – 3 days left to answer.
my monthly expenses are slim so im not worried about that.

My problem seems to stem from my home, i have about 40k worth of equity in a 117k home.

With that kind of equity, it really does not make sense to file a chapter 7 because in my state you lose all equity besides 5k no matter what.

It really doesnt make sense to do a 13 because as already stated i cant afford the payments now,much less the payments to all my creditors plus the mortgage.

And the only other options are selling, of which is not really an option because foreclosure has already been initiated.

Or a deed in lieu of foreclosure, but then im giving them all of my equity for "free" although the foreclosure would likely not show up on my credit report and i could begin to repair the other damage.It would be faster to do this than to wait 10 years for a BK to come off the credit or 7 years for a foreclosure to come off.

OR just let it be foreclosed on……thats not appealing at all ofcourse.
ADVICE?

Unfortunately my business failed. I had numerous credit cards that were used to purchase business supplies, inventory, etc. When the economy fell, the business took a huge dip, leaving me with no way to pay for the monthly expenses to keep the business afloat. Not to mention, no way to purchase inventory to keep the business from failing further. I am in over my head and have considered bankruptcy but I have some circumstances that have caused me to have to delay the inevitable. In the mean time, creditors are threatening law suits etc. I have a family and this situation was an honest try to make a business work but obviously didn’t. Needless to say, I am worried about the amount that can be garnished as we are struggling already, living pay check to pay check. Can someone answer my question?

For the first time, I find myself at a crossroads I have never experienced before. Any thoughts or opinions would be greatly appreciated. (The story will be long…so thanks in advance for your time in reading it).

I am currently a Residential Property Manager, living and working in the Philadelphia suburbs. I have been in Property Management for 13 years (10 years in Los Angeles and 3 years in PA). I have been with my current employer just over 3 yrs. I work for a small company, basically it’s me and the owner. Lets call the owner "B". My FT salary is not enough to cover all of my monthly expenses, so I’ve been bleeding money every month, since I got here.

I’ve stayed with "B" for a few reasons: First, "B" is self-made millionaire and I am learning how he did it and how he maintains it, which I believe to be an invaluable experience that could not be had anywhere else. Second, I have a strong sense of loyalty and do not want to walk out and leave him in a bad spot.

The first change "B" made (and it was done with no warning what-so-ever) was to cut my hours in-half (from FT to 20 hrs a week). Because of this, instead of the minimal amount of bleeding, that I have been putting up with, it is now substantial and un-sustainable. At this rate I will completely broke in 3 months. Also because of this change, extremely important tasks are not getting done, due to the lack of time. Many facets of the company are already in complete dis-array and it’s only a matter of time before things get even worse. I really hate to see this happening and both of these items bother me equally as much.

About a week after "B" made that shocking change, there was suddenly someone new in the office. A long time friend of my boss’, who is the COO is a software company (currently). Lets call him "A". "A" immediately took over all the leasing activities and is slowly making other procedural changes to the company, not only to what I do, but with the maintenance guys, as well. "A" stays here for a week, than goes "home" to his other job/family for 4 days, then returns again.

Just this last week, now there is another new person in the office. Lets call her "M". "M" was presented to me as someone who was there to "help with the filing and administrative tasks". However, "M" seems to be doing more than that. On Friday I was asked to teach "M" how to do the payables and "A" took her on an all-day tour of all the properties. On a side note: "M" is as sweet a pie to "B" and "A", but has been abrasive, rude and full of attitude with me.

So, my first question is: What is going on here? None of these changes make any sense. Everything was running smoothly and efficiently before these changes and all these changes have done is create chaos and disaster. (I’m the type of person that would recognize/admit if there was something wrong with my performance. There wasn’t. Everything was in good order, just as it has been for the last 3 yrs).

So, now I’m presented with a cross-roads, as to what I should do now. Obviously, I cannot continue like this and allow myself to spiral into bankruptcy!

But, before you answer that questions, I need add some more information.

In February, I got my license and become a REALTOR. My only real client at this point, is "B". Who, despite what is going on, is still making offers on new properties (which means commissions for me). Trying to get new clients (other than "B" has been very difficult and has not gone well).

A little about my background:

I have a BS in Business Administration and a BS in Information Technology.

Despite that training, one thing I have always wanted to do is be a truck driver (don’t ask — just something I always thought I would like). I should mention that I have never liked Property Management, nor have I ever been truly happy doing it. I came very close to becoming a trucker years ago, but due to family circumstances I got shuffled into the being a Property Manager and have just stayed with it.

What is available to me right now:

My best friend (and godson) live in Gainesville, FL. Whenever I want to leave, I have a home waiting for me there.

Unfortunately, from what I can tell looking at job boards, Gainesville does not seem to be a hot bed of great jobs and I haven’t the slightest idea of the condition of the RE market there.

On the plus side: I have a home waiting for me, people that are closer to me than my family waiting for me and the cost of living in Gainesville is almost half of what it is here (e.g. most things are half the cost there, versus here in Philly).

With all this being said: If it were you, what would you think and do? Should I try to secure a job

For lack of a better term i was forced to take out a mortgage last year on my home that was paid for. The terms and percentages were awful but thats besides the point.

My income at the time was sufficent to pay my bills and the mortgage.

I ran a successful business for a little over two years until 4 months ago when things went downhill. My mortgage payment is more than most people make in my area in 2-3 paychecks and now im unemployed with a SMALL list of other monthly bills besides the mortgage. I do have about k in other unsecured debt from the business and other unsecured creditors from when i was young that i never took care of.

I have thought about bankruptcy, chapter 13 is a no-go mostly because i cant afford the mortgage payments now so why would i waste my time with a 13?Otherwise it could work,but otherwise i dont really need a bankruptcy if were not including the house mortgage because i could just set up monthly payments with my creditors at a small payment.
7 minutes ago – 3 days left to answer.
my monthly expenses are slim so im not worried about that.

My problem seems to stem from my home, i have about 40k worth of equity in a 117k home.

With that kind of equity, it really does not make sense to file a chapter 7 because in my state you lose all equity besides 5k no matter what.

It really doesnt make sense to do a 13 because as already stated i cant afford the payments now,much less the payments to all my creditors plus the mortgage.

And the only other options are selling, of which is not really an option because foreclosure has already been initiated.

Or a deed in lieu of foreclosure, but then im giving them all of my equity for "free" although the foreclosure would likely not show up on my credit report and i could begin to repair the other damage.It would be faster to do this than to wait 10 years for a BK to come off the credit or 7 years for a foreclosure to come off.

OR just let it be foreclosed on……thats not appealing at all ofcourse.
ADVICE?

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.

For lack of a better term i was forced to take out a mortgage last year on my home that was paid for. The terms and percentages were awful but thats besides the point.

My income at the time was sufficent to pay my bills and the mortgage.

I ran a successful business for a little over two years until 4 months ago when things went downhill. My mortgage payment is more than most people make in my area in 2-3 paychecks and now im unemployed with a SMALL list of other monthly bills besides the mortgage. I do have about k in other unsecured debt from the business and other unsecured creditors from when i was young that i never took care of.

I have thought about bankruptcy, chapter 13 is a no-go mostly because i cant afford the mortgage payments now so why would i waste my time with a 13?Otherwise it could work,but otherwise i dont really need a bankruptcy if were not including the house mortgage because i could just set up monthly payments with my creditors at a small payment.
my monthly expenses are slim so im not worried about that.

My problem seems to stem from my home, i have about 40k worth of equity in a 117k home.

With that kind of equity, it really does not make sense to file a chapter 7 because in my state you lose all equity besides 5k no matter what.

It really doesnt make sense to do a 13 because as already stated i cant afford the payments now,much less the payments to all my creditors plus the mortgage.

And the only other options are selling, of which is not really an option because foreclosure has already been initiated.

Or a deed in lieu of foreclosure, but then im giving them all of my equity for "free" although the foreclosure would likely not show up on my credit report and i could begin to repair the other damage.It would be faster to do this than to wait 10 years for a BK to come off the credit or 7 years for a foreclosure to come off.

OR just let it be foreclosed on……thats not appealing at all ofcourse.
ADVICE?
Ok i dont think you guys are reading everything.

Selling the home is pretty much out of the question because of the mediocre or slow real estate market combined with the foreclosure that has already been initiated and would most likely only take 3-4 weeks to be final.

OK any other advice?