Long story… Lost my job with one of the Big three in August of 2008, a few months later I found a business opportunity… this is where it gets ugly.
When I lost my job I had about $120k in savings and the job prospects here in Michigan didnt look that good. I decided to open a restaurant, my brother has over 35years in the business and would be the experience needed to operate the restaurant. I did the restaurant build out from savings and put about $30k on my personal credit cards. And I also signed a 3yr lease on the building, and a $75k personal guarantee on a note for the business.
The business did very well the first couple months, then the holiday season and new year slow down has drained all the money I had, along with about $50K in home equity that.
It looks like we will be closing the business, and Bankruptcy looks hard to avoid.
With bankruptcy looking like the only way out, is there anyway to protect my 401k which I have about $150k or will it need to be liquidated in bankruptcy. Can i use it to payback my mother who I have borrowed about $75k from, gift some to my children before it needs to be liquidated. Just hate to loose everything for trying to start a business.
Your 401K is protected in bankruptcy. Don’t worry about that.
It might be time to renegotiate the lease and your business debts with your vendors and landlord. And don’t put one more dime of business debt on your personal cards. You can’t keep funding it.
I’m so sorry to hear about your path life elected to deal you. Sounds like you went from auto industry stress into restaurant stress.
It might just be that you’ll have to reorganize the business in bankruptcy as well if you think it has a shot but needs some better terms at this moment.
Click here to find a local bankruptcy attorney you like. Make a free appointment to go in and talk to them and hold your head high. You are not alone and at this point the path from here to the other side of this mess is going to be to come up with a process to address it, probably with bankruptcy.
Please let me know what happens. Keep me posted.