Matt wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.
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“Dear Steve,
I just found out they changed my terms on my credit card, I’m at the limits on two cards totalling $40,000. I borrowed against our equity line another 25,000. 80% of this is debt to due to poor business management and the rest bad spending habits. we own our home in CA and the value has dropped. we also own a small business and I have a full time job
I guess I’m trying to decide if I should go through bankruptcy or a debt comsolidation. what happens with the small business, our house if we do bankruptcy?
Matt”
The Answer:
Dear Matt,
Yes, it really sounds like you are maxed but it is good that you’ve recognized the actions that have brought you to this point. Now, just don’t repeat those mistakes and let’s move forward.
The issue with the business is really dependent on if you are personally liable for the business debts and/or the legal status of the business. It make a big difference if the business is a corporation or an LLC versus a sole proprietorship.
Your home might not be worth keeping unless the value of the home can be reduced to current values. There may be help available through bankruptcy with that if needed new legislation passes that gives bankruptcy judges the right to adjust your mortgage. Otherwise, it might be better to let the home go back to the bank and then include all your debt and the money the bank will go after you for on the mortgage, in a bankruptcy.
Really what you need at this time is to click on the link to schedule a free bankruptcy consultation with a local bankruptcy attorney and discuss all these issues that I brought up to you. You really need more specific advice than I can give based on the limited information I know about your situation.
