Pre Chapter 13 questions

[ekorB]

I've read a LOT of information here...and have learned a TON. I still some questions that I'd like to post that pertain to my situation.

Here's our circumstances:
My wife and I started a business 2 years ago that is currently not doing too well. We've been living off of credit for the last 2 years, paying one credit card with another. We owe about 200k in CC debt. This debt is about 30% personal and 70% business related.

The business has 5 personal guarantors (is that the right terminology?), my wife and I, my parents, and a former client of my wife's. We all signed personal guarantees on the lease for the business and the equipment used for the business. The business can float if we didn't have the CC debt. Actually we would have to put 500-700 a month into the business to completely float. The 500-700 a month can be covered by my parents. We were giving my mom $700 a month to watch our 2 kids. Given the circumstances, they have agreed to stop taking payment for watching the kids and apply the $700 to the business.

We don't want our bankruptcy to affect my parents or the former client. We have decided that in order to do so, we'll have to keep the business open so that the funds earned can be used to pay for the lease and equipment...at least until the end of the lease (1 year left on lease).

I make about 70k annually from my full time job. My wife runs the business and does not take any pay from the business as their has not been any profit to take from.

We've seen a lawyer for the free consultation. We're pretty sure we're going to be using him as he's been great to one of the other shop owners in the complex whose business is going under.



So here are my questions:
The $700 that we were giving to my parents...should we continue to pay that to my mom so that it will look like an expense for daycare when we file for bk13? My parents can then cut the check to the business...I guess I'm looking for the best strategy here.

We've stopped paying on most of the CC's. Should we stop paying on them entirely? We're paying on one of them because that's where my direct deposit goes to. Should I open another bank account so that I can have my check deposited there?...Does it matter?

I'm not exactly sure when we will file BK13. Is it ok to continue using CC's that are not delinquent?

I have a ton of other questions, but I don't want to go overboard here with my first post.

Thanks for all the help!

[gregorino]

Have you had an initial FREE consultation? We met with an attorney for about 2 hours and had a lot of our initial concerns explained to us in detail.

If you've been paying the $700 for daycare consistently, you'll be able to list it on the schedules as an expense which will help hold down the disposable income going to The Plan (but see what the attorney thinks about whether Mom is considered an "insider" That could be looked upon unfavorably by the trustee).

Stopping payment on all credit cards may be wise - first, you could save up for a few months to pay the couple thousand or so for your attorney, and second, there's a look back period when you file to see if some of your creditors were receiving preferrential treatment.

I'm just learning all this myself, and getting ready to file Pro Se this week, so my thoughts are just that - thoughts to consider! The free consultation is something you ought to do for sure....maybe even do a couple. I went to mine after doing a bunch of research and had 2 pages of questions to discuss....