My father co-signed on a line of credit for my business and used his farm property as collateral. (valued at $325,000) .
I did not complete the payments and he bailed me out to the tune of $20,000 and told me NEVER to risk the farm again!!
I did not close out the line of credit and have subsequently amassed a debt of $220,016.66—not telling him that I did this. The bank is calling the loan.
The loan is in my business’ name. My business is now going bankrupt.
If I do not pay the loan by May 2, the farm will be in foreclosure.
Yes, I have royally screwed up.
My question is, is there any way to prevent foreclosure?
Can another party or my dad (refinancing and Repurchasing his farm) pay off the loan and have it out of the bankruptcy of my business?
I need a solution and FAST.
I’m so sorry to hear about this situation, for the both of you. The only way to prevent the foreclosure of the farm would be for someone to refinance the debt, or sell the farm. But even if someone refinanced the farm, how would you afford the payments? You’d face the same issue in bankruptcy.
If you were going to go the refi or bankruptcy route it would make logical sense to attempt to renegotiate the loan with the bank that has it now. But with a failed business I can’t see ho you’d even afford those payments.
I wish I had some words to comfort you and make this process less painful. But I don’t know what those words would be. The emotions that you must be going through knowing your father has a pretty good chance of losing the farm must be extreme.
While you certainly bear the vast majority of the blame here, he shares some as well. He should have made sure the line of credit was closed and that would have prevented you from running it back up again. That would have protected his farm and way of life.
The best thing you can do now is to be totally open and honest with him what the reality of the situation is. Don’t hide it from him. Make sure he is 100% informed. No more surprises.
You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
P.S. Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.