So worried - Lawyer threatening to drop us

[Lisa68]

We just received a letter from our lawyer, that we've already paid, that if we don't submit our paperwork *and* pay $500 by Jan 31st, they will drop us.

We first met with them about 6 months ago (which is when we stopped paying our credit card bills), and through email we have let them know we were intending to proceed.

Why haven't we submitted our paperwork before now? We have a business we need to gather info on which is an arduous task. I'm the one doing most of the work. I've been severely depressed, feeling suicidal at times, and I've been in denial about this whole thing at times. On top of all that, I have to try a keep our business afloat. Lame excuses, I know.

I know it's on us to get this done, and we will, if we have to fore go sleep, have my mother come babysit, while we get our crap together.

I'm just sort of venting here, but I'm hoping someone here can tell me we aren't in serious trouble for taking so long to get this done. I feel just sick about all of this.

Thanks,
Lisa

[RunningMan]

Unless you have any law suits pending against you, I doubt you are in serious trouble for not filing yet but I don't know anything about your situation. Do you have an accountant that can help with the business records?

If you have already paid your attorney and they haven't done any work on it yet, why do they want another $500?

[Lisa68]

We haven't received any notice of a law suit, but we have directed our creditors to our lawyer.

I emailed the lawyer's office immediately after receiving the letter. Hopefully I'll find out tomorrow what the $500 is for.

[discouraged]

Probably because they gave a retainer.

Lisa - I know where you are at. You probably paid 2/3 if not more. I did not pay a lawyer yet but did see one that assumed (and I did too) that he would be my choice. Just before my decision was made, got a temp job offer and have put things off. I KNOW how that is. I, too, have to get my act together.

What I plan on doing is calling more lawyers, just to make sure the one I choose is willing to fight for me, not just for my money, and gather the original paperwork together, update it and get this done.

It is going to take hard work on your part, but from all the reading I've done here, it will all be worth it in the end.

Just hang in there. I'm sure you have some original paperwork, as I do, and just update it. Try to keep in mind that this will end. Hard task, but necessary.

Good luck! Drink some good stress relieving tea - and know this will be soon over and done with.

[RunningMan]

Well if the underlying reasons for your BK are cured by filing, you should feel relieved and not sick about it. Hopefully you are not trying to prop up a failing business that is going to continue to drag you down. I have been there and done that.

Tea doesn't do much for my stress, it usually takes a few whiskeys...

[Lisa68]

Thanks for the responses, I appreciate it.

We are trying to prop up a failing business because it's all we have. We've made some changes in our business plan, and things are improving, but it is so stressful, I'm ready to move on at this point. My husband and I are both looking for jobs.

As the economy improves, I think our business will improve somewhat. We've switched to pre-paying for merchandise rather than relying on credit with our vendors, so we are only spending money we have.

The part that makes me sick is having some of our vendors find out that we are BK when our business debts are included in the BK (we are sold propreitors, so the business debt is our debt). Also, just the general stress of the situation.

[discouraged]

I don't know your plans but talk to your lawyer and, if He/She advises, talk to your vendors if you are planning to pay them.

Declaring Bankruptcy is hard on all of us, but continue to read the forum. It is a business decision. You have to remember that and keep it in mind. If your vendors were in the same situation, they would have to make the same decisions.

[RunningMan]

Well I can understand why you are stressed then. I hope your new business plan works out. If they are larger vendors, you won't be their first customer to have a BK and hopefully they will allow you to keep purchasing from them COD.

[walkthaplank]

Maybe propping up a failing business isn't the best plan. Do you think you can find a job that pays reasonably well or at least what you are netting from your business? Filing BK is a business decision, but you seem to be putting a lot of emotion into the business aspect. Since your debts are largely business related you would likely be able to file CH7, if it were me, I would have to look very hard to find a reason NOT to file CH7 and walk away from the business. I am surprised your lawyer isn't pushing for that as it would be simple and get you the best benefit. If the economy improves in the future you could always start up again, only debt free and following the model of paying as you go.

Just thought I would toss that out there. Best of luck with whatever you do.

[RunningMan]

We had mostly business debt too, but a lot of it was taxes that a chapter 7 couldn't get rid of and we had gotten behind on our mortgage due to a badly negotiated payment plan with the IRS for back payroll taxes. I had hired a tax attorney to negotiate with the IRS who did us no favors. The chapter 13 is also allowing us to do a lien strip, so a chapter 7 isn't always feasable even for business debt.

[Lisa68]

We don't have much business debt -- maybe $5000. Our debt is credit cards -- about $100K. A lot of that came from business expenses over the years though. Our business got built up too much and was hard to sustain, then impossible to sustain in a poor economy. I don't have a head for business. That much is clear. We used a business consultant a while back -- she was somewhat useful, but kind of a flake. We later tried talking to an acct -- he was useless. I don't know where to turn anymore for help.

I am very emotionally invested in our business. It's all consuming. I'd be happy to get rid of it though.

I think we will have a tough time finding jobs. My husband worked in IT, but has been out of it for 10 years (working for me -- still doing computer stuff though). I think it is going to take knowing the right person for him to get a decent job at this point.

I appreciate the responses.

[tyson24]

Sorry Lisa. I know how overwhelming this can be. I didn't have a business, but a rental property. I know it seems like a dark tunnel right now, but there is light at the end of it I promise. I know how it feels to be so emotionally invested in the debt. Just get through it (I wish I could babysit for you, I am home all day too!) and move on. Nothing feels better than looking at all this crap in your rear view mirror. Sorry not much help in the knowledge department, but I feel for you

[RunningMan]

You take a lot of risks and make a lot of sacrafices to build a business from scratch and you can't help being emotionally invested in it. Not to mention feeling responsible for your employees and keeping their jobs as well. I love being self employed and the good times were very good, but the bad times were a complete nightmare. It is difficult to walk away from it, but you do need to take the emotion out of the decision. If the business is not viable, you need to get out or you will keep getting sucked down deeper and deeper into that hole. The BK will get rid of your debt, but it won't make your business profitable and remember you will have to make monthly payments to the trustee for a chapter 13. Changing your business model might make the difference, but you are going to be crippled without credit lines from your vendors. You can't finance growth without a cash reserve or credit lines. You are in a very precarious position for a business.

[walkthaplank]

We don't have much business debt -- maybe $5000. Our debt is credit cards -- about $100K. A lot of that came from business expenses over the years though. Our business got built up too much and was hard to sustain, then impossible to sustain in a poor economy. I don't have a head for business. That much is clear. We used a business consultant a while back -- she was somewhat useful, but kind of a flake. We later tried talking to an acct -- he was useless. I don't know where to turn anymore for help.

I am very emotionally invested in our business. It's all consuming. I'd be happy to get rid of it though.

I think we will have a tough time finding jobs. My husband worked in IT, but has been out of it for 10 years (working for me -- still doing computer stuff though). I think it is going to take knowing the right person for him to get a decent job at this point.

I appreciate the responses.

Ok, this is where your lawyer earns his fee. If you can tie the credit card debt to the operation of the business, it is still business debt, not consumer debt. If you are willing to walk away from the business, talk to your lawyer about it. If you have tax debt or assets you need to save, a 13 may be your only course, but if you can get out from under it, do it.

You may have a tough time finding a job, but your business is likely going to continue its downward spiral. How far in debt will you be then? Will you be worse off or better off? You have been putting it off too long. I think your lawyer is doing you a favor by kicking your butt. Almost everybody here got into bankruptcy court with a fair amount of denial and procrastination.

Ultimately remember this is only money, it is only things. Don't let it bury you under a mountain of fear/guilt/worry/depression. Get your stuff together, pull your act together, make a plan and take care of business. Get past this and move forward with your life. Once you get this going you are going to feel a lot of that weight fall off your shoulders. You'll get to breathe again.