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Home > Reader Questions > I’ve Got Small Business Problems, Debt, and Not Able to File for Bankruptcy Protection. – Teresa

I’ve Got Small Business Problems, Debt, and Not Able to File for Bankruptcy Protection. – Teresa

In business for 15 years, very stable, great credit history (760). In 2008 just prior to the stock market collapse took a new business venture, ended by January 2009. Ultimately ended in a reposession, credit card debt, and 9 months of unemployment. Currently working about 70% of what I would consider normal (before the recession started). Working just enough to survive, no savings yet. Expecting things back to 100% by spring 2011. Have lots of equity in home and one piece of equipment. Credit score currently 437.

Where do I begin? The above information pretty much tells the story, so I won’t repeat it. We have been told by 3 attorneys that bankruptcy is not an option. They say chapter 7 is total liquidation, we would lose everything including our furniture and clothing. Then they stated chapter 13 repayment plan would be so high we could not afford the monthly payments. We are looking at $60,000 deficiency on the reposessed loader and after late fees and interest over $100,000 in credit cards. I cannot believe there is “no” help for us what so ever! We would gladly pay a resonable portion back, but in no way can afford $2000.00 to $3000.00 a month we have been quoted. They also suggested to get a home equity loan and pay back all we could with that, but with a 437 credit score, a reposession and nearly $100,000 in unpaid credit card loans another loan in out of the question! We are in a pickle to say the least and any advice would be appreciated.

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Ive Got Small Business Problems, Debt, and Not Able to File for Bankruptcy Protection.   Teresa
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Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Damon Day

    I think a phone consult would be good. We can get into all of the specifics of what you are dealing with and figure out a custom plan that you will need to move forward with based on your current and projected circumstances. I will be around when you are ready.

    http://getoutofdebt.org/Damon-

  • Steve Rhode

    What state do you live in?

  • Teresalynnstacy

    Thank you again. I am shocked at the lack of information and help we are getting from the attorneys in our area. And yes we have been told they would take everything we have including our clothing and our wedding rings! So needless to say I am scared to death to do anything, but I am going to have to do something even if it is on my own, which in its self is scary. Unfortunatley we were not in an auto accident or trying to get disablitly, if that were the case the lawyers around here would be knocking down our door. We don’t have a run of the mill bankruptcy so we can’t find any one to help us. I think I need to schedule an appointment with you for a phone consultation. Right now I will take any information I can get.

  • Damon Day

    You are welcome. I am confused about something though. You mentioned 100K equity in the house but would never be able to sell it for that. So technically then you don’t have that much equity because the equity in reality is determined by what someone is willing to pay for the house now. You also mentioned other issues with the business and not being able to find an attorney that will touch the BK, however, the one telling you that you will lose everything including your close sounds a little fishy.

    I agree with Robert, to jump on zillow.com and see what value it is pegging your house at. If it is closer to 150K you may be able to keep the house.

    As I see it, your only options are BK, or ignore the creditors to buy time and try and work out settlements with them when your income recovers. I would first make absolutely sure you can’t file a chapter 7. If that is the case then you just need to strategically buy time until you have some resources to address the situation. Again though, this is just very general information.

  • Teresalynnstacy

    Hi, we live in southern WV and we have a homestead exemption of $50,000. Three years ago we had our home appraised and it came in at a little over $200,000, we only owe $98,000. Like I told the previous person getting that would be a different storyconsidering our economy here. Another problem we have is this is not a chapter 7 run of the mill bankruptcy, there would be a little more work involved in this because of our equity and the small business, so finding an attorney to take our case has been impossible.

  • Teresalynnstacy

    Thank you for the reply. We live in southern WV, so selling our house for what it is worth would be a stretch. One home similar to ours was for sale for 3 years before it sold and she took a $100,000 loss! That is part of our problem, on paper we have “lot’s” of equity…getting that amount in a sell would be another story. Also if we sold our home we would then have no where to park our equipment, since we have a small garage an parking area for them here. Right now I am looking for any information I can find to do something about this myself and leave the atorney’s alone and not do the debt settlement.

  • Lewis Roberts

    What state do you live in? Did the bankruptcy attorneys tell you that they could not protect the equity in your home? Almost all states have some sort of homestead exemption – it just depends on how much.

    What is your home truly worth? Have you ever checked on a site like http://www.zillow.com? How much do you owe on your mortgage, or mortgages?

  • Lewis Roberts

    What state do you live in? Did the bankruptcy attorneys tell you that they could not protect the equity in your home? Almost all states have some sort of homestead exemption – it just depends on how much.

    What is your home truly worth? Have you ever checked on a site like http://www.zillow.com? How much do you owe on your mortgage, or mortgages?

    • Teresalynnstacy

      Hi, we live in southern WV and we have a homestead exemption of $50,000. Three years ago we had our home appraised and it came in at a little over $200,000, we only owe $98,000. Like I told the previous person getting that would be a different storyconsidering our economy here. Another problem we have is this is not a chapter 7 run of the mill bankruptcy, there would be a little more work involved in this because of our equity and the small business, so finding an attorney to take our case has been impossible.

  • Damon Day

    Well, from the sounds of it, I see two options given the limited information you provided. Option 1 is to sell the house and depending on the amount of money you receive, decide how to best deal with the debts. Option two, if selling the house is out of the question, ignore the debt and focus on earning more income. If you are correct and your income improves in spring of 2011 then you can possibly address the debt at that time. This is of course very generic advice based on the limited information you have provided.

    What do you think about either of those options?

    http://GetOutOfDebt.org/Damon-

  • http://DamonDay.com Damon Day

    Well, from the sounds of it, I see two options given the limited information you provided. Option 1 is to sell the house and depending on the amount of money you receive, decide how to best deal with the debts. Option two, if selling the house is out of the question, ignore the debt and focus on earning more income. If you are correct and your income improves in spring of 2011 then you can possibly address the debt at that time. This is of course very generic advice based on the limited information you have provided.

    What do you think about either of those options?

    http://GetOutOfDebt.org/Damon-Day

    • Teresalynnstacy

      Thank you for the reply. We live in southern WV, so selling our house for what it is worth would be a stretch. One home similar to ours was for sale for 3 years before it sold and she took a $100,000 loss! That is part of our problem, on paper we have “lot’s” of equity…getting that amount in a sell would be another story. Also if we sold our home we would then have no where to park our equipment, since we have a small garage an parking area for them here. Right now I am looking for any information I can find to do something about this myself and leave the atorney’s alone and not do the debt settlement.

      • http://DamonDay.com Damon Day

        You are welcome. I am confused about something though. You mentioned 100K equity in the house but would never be able to sell it for that. So technically then you don’t have that much equity because the equity in reality is determined by what someone is willing to pay for the house now. You also mentioned other issues with the business and not being able to find an attorney that will touch the BK, however, the one telling you that you will lose everything including your close sounds a little fishy.

        I agree with Robert, to jump on zillow.com and see what value it is pegging your house at. If it is closer to 150K you may be able to keep the house.

        As I see it, your only options are BK, or ignore the creditors to buy time and try and work out settlements with them when your income recovers. I would first make absolutely sure you can’t file a chapter 7. If that is the case then you just need to strategically buy time until you have some resources to address the situation. Again though, this is just very general information.

      • Teresalynnstacy

        Thank you again. I am shocked at the lack of information and help we are getting from the attorneys in our area. And yes we have been told they would take everything we have including our clothing and our wedding rings! So needless to say I am scared to death to do anything, but I am going to have to do something even if it is on my own, which in its self is scary. Unfortunatley we were not in an auto accident or trying to get disablitly, if that were the case the lawyers around here would be knocking down our door. We don’t have a run of the mill bankruptcy so we can’t find any one to help us. I think I need to schedule an appointment with you for a phone consultation. Right now I will take any information I can get.

      • http://GetOutOfDebt.org Steve Rhode

        What state do you live in?

      • http://DamonDay.com Damon Day

        I think a phone consult would be good. We can get into all of the specifics of what you are dealing with and figure out a custom plan that you will need to move forward with based on your current and projected circumstances. I will be around when you are ready.

        http://getoutofdebt.org/Damon-Day

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