Our sick story...

[CindyLou]

Hi, sorry you are going through all this but want to point 2 things out. First, you MUST mention that you are owed money. There is a question on the form that ask if you are owed money. (can't recall exactly where, but its there) so you MUST tell the truth! Also, if this person decides to add you on a creditor then it could be found out. Honesty is the BEST policy in BK!!Secondly, your credit score is such a minor point here, because if you are being sued then there will probably be a judgement which will then be on your credit report and that will hurt your credit just as bad as a BK. I would completely put the score thing out of your mind and make your decisions seperate from this. Believe me, once you get past that, things are much easier! Be sure to keep us posted, and welcome to our family!!

[busted]

Your support almost has me in tears. I have been through this board several times but never could find the courage or energy to post such a long story. I am glad I finally did.

I did speak with an attorney yesterday here in VA. He made an appointment with us on next Wed. He seems to think that our bk situation is not as confusing as we are making it out to be in our minds. He said that we see it as confusing because we are the victims that have gone through so much and so we try to explain the whole mess into the bk case. He said if we only look at the bk facts that it doesnt sound confusing.

As for the money owed to us. I do want to see if the trustee can do anything about it to try to get it out of those people. I dont even want it, I will be satisfied to pay debts with it, that is what it was supposed to be for in the first place. We would not be in this bad of a situation if they would have only paid us that money in the first place.

As for the con business partner that filed bk, he did not list us as creditors. I have a copy of what is called his petitions and I see that he only listed my dh as a 25% business partner, which is a lie because we were 50/50 on the business.

True, my credit score is not too major an issue at all and if I have to file with my dh, it is ok, but we are only concerned with not being able to move forward with our business because the type of business we do, one of us has to be able to sign leases on buildings to open our stores and we are afraid we will not be able to do that with a bk on my credit.

Because we have a finance company that is on a sort of personal level with us, they have promised to finance us our next 2 projects in order for us to move on. The atttorney was concerned that if I file bk with my dh that the finance co. would not want to deal with us after all.
If that be the case, we are totally 1000% done business wise and have absolutly nothing to move forward with

Sorry again about the long post but I totally appreciate you guys and all the hugs and support

[petrified]

Busted,

I am so sorry that you are going through this and for the agony you have endured for the past two years.

I had to file Chapter 7 due to a failed business also and received notice of my discharge just this morning.

Your case seems to be much worse than mine monetarily, but believe me, I know EXACTLY how you are feeling. I put all of my money, blood sweat and tears into my corporation only to have it fail for reasons beyond my control (let's just say that I was way too trusting and ethical). For two years, I suffered extreme stress and a nervous breakdown. Trust me when I tell you that this is the worst of it right now. Once you file.....it does become easier.

In your case, you CAN file a Chapter 7 and more than likely still keep your home. Your debts are primarily business debt, regardless of whether it is in your name or the business. You can file the 7 and not do the Means Test.

I also urge you to consider a particular attorney who is also a Trustee. He is handling one of the biggest fraud investigations ever - a ponzi scheme that crosses international boundaries. He can probably help you with the partner bk fraud AND your bankruptcy. I will try to PM you his information. (I am also in VA).

It will get better. Treat the bankruptcy as another business transaction and stay focused. You can get through this.

best of luck to you!

P

[SinkingFast]

I did not mean that you should not disclose the $250K on your paperwork. As Cindy pointed out, you'll have to.

Just, probably the only time you may actually see the Trustee is at the 341 Meeting. Unless you were to have a conference with the Trustee in a different setting, most debtors only see the Trustee 1 time. And the 341 Meeting is not the Forum for this discussion.

I believe the attny you spoke with is correct. We all do/did what you're doing. We live thru it so each an every aspect assumes a level of importance. Attnys cut thru the mass of emotional attachments and glean out the important aspects.

[petrified]

Check your deed

Busted,

I just noticed in another thread that you state only your hubby is on the mortgage for your home. This could be excellent news if you find a way not to have to file with him. Check the deed - does it list both of you and title being held as Tenants by the Entirety?

If yes, he can file chapter 7, no means test AND you get to keep the house because Virginia strongly recognises Tenants by the Entirety. This way of holding title to property means that one spouse cannot encumber the property without the other. It also means that liens cannot be placed against the property for debts of only one spouse.

P

[RBAllis]

I have a score of 504. I hired an attny today. I am making payments to be able to file. I don't know what I would do if one of my creditors objected. My financial issue are in large because of having my mail returned to sender and becoming homeless. My new attny at least explained to my why a Chapter 13 was far less scary that a Chapter 7. I have pre-liquidated. Most of my personal property was sent to the dump.

[CindyLou]

Just opposite is true in most cases. Chapter 7 is much simpler and less scary. Do you qualify for chapt 7? It is reccomended that you see at least 3 attorneys before deciding. Tell us more about your situation and maybe we can help you more

[busted]

Your debts are primarily business debt, regardless of whether it is in your name or the business. You can file the 7 and not do the Means Test.
P

So even if everything was personally guarenteed, it can still be looked at as business, is that what you mean?
And I am confused at why we would not have to do a means test.

I also urge you to consider a particular attorney who is also a Trustee.
P

I am very confused on this. Can an attorney be a trustee and is that good. Wouldn't an attorney who is a trustee not be trustworthy to work for us? Not sure if I understand how this works.

[SinkingFast]

Standing or Panel Trustees are the BK Court Officiant you see in your Local Court. They work, in the BK Court, on behalf of the United State's Trustee's Office.

Many Trustees are in fact practicing BK attnys. You can hire a Trustee to represent you. When a Trustee is representing a client, they work 100% for the client, not for the Court. But, obviously, if you hire an attny who is a Trustee, they cannot be assigned, by the Court, to hear your case. That Trustee would pulled out of rotation when your Case is filed and assigned.

BK attnys are a close knit community. They generally all know each other well anyway. But the advantages to hiring a Trustee can be great. They know what the other Trustees want to see. What the other Trustees expect. Maybe how to present aspects of your case in a more favorable light than possibly Joe Blow BK attny might.

[busted]

That makes 100% complete sense, thanks

[petrified]

So even if everything was personally guarenteed, it can still be looked at as business, is that what you mean?
And I am confused at why we would not have to do a means test

Busted - all of my debt in my chapter 7 was personally guaranteed business debt so yes, that is what I mean. You have proof that it is business debt because (if I recall correctly) you have signed leases and I am sure you have other bills/documents that show your debt is really for the business.

The Means Test - if you look at the form, there is a box that is checked "Consumer debt" or "Business Debt" (or something like that). If you check the Primarily Business debt then the means test does not apply and you stop at that point. There are other forms that will be used to calculate expenses and income (Schedules I & J).

I sent you a private message with name and contact info of an attorney who is also Trustee because he also handles clients filing for bankruptcy. I particularly recommended him because of the fraud issue with your former business partner. He WILL ferret out this guys hidden assets.....read up about him. He is good.

If you have any other questions about this, let me know - I had to do a LOT of research for my attorney because he had not had to deal with someone who had to file due to business failure/personal guarantee.

P

[Spartan]

I am very confused on this. Can an attorney be a trustee and is that good. Wouldn't an attorney who is a trustee not be trustworthy to work for us? Not sure if I understand how this works.

When you file Bk, your case is assigned a trustee. This trustee is usually, but not always, also a practicing attorney. When the trustee is not working as a trustee, he can represent the bk filer. So if you hire an attorney who also works as a trustee, then he/she would become your attorney, and he/she cannot be assigned as a trustee to your case. He/she can still be assigned as a trustee in other bk cases.

I used an attorney who also works as a trustee. In my case, the attorney is extremely competent.

That said, just b/c an attorney is also a trustee, does not necessary say whether he/she is a competent attorney or not.


FYI. There is also the US Trustee. You don't need to worry about him/her. THe US Trustee administrates the bk process in your district, appoints, assigns and supervises the trustees that work on the bk cases.

[Spartan]

There's another angle you may want to consider, after the emotions have settled a bit.

Welcome, by the way. You found a great forum of people here!

This 250k that is owed. . . do you want some sort of justice?

If so, you can show up at your former business partner's meeting of creditors and stake your claim.

You can tell HIS trustee about the money. You can also tell HIS trustee about him mentioning offshore accounts. I doubt you will be the only creditor to appear in a case involving millions. Want to wreak a little havoc? Send a letter to the US Trustee.

If you plan to try to keep your home and other assets, you may be pushed toward a Chapter 13 which takes 5 years anyway. Why not "spread the joy"?

I doubt there will be much, if any, impact on you in a chapter 13 case by revealing this stuff, but it could make HIS life a living hell, the person who conned you.

In a chapter 7, well, that's a whole different thing. If you want if "over and done" then something like this sure could drag it out.

Doesn't seem right, though.

Good luck,

-dmc

I second this.

[spell]

Most people don't need to surrender any personal belongings in a Chapter 7.
But I see one huge ol' asset on your books, the $250k that is owed to you. You need to report that and it's fraud through hiding assets if you do not.
Based off the complexity of your case already, I'd expect the trustee to give your financials a through run through to find stuff like this.

The Trustee will make his decision if he will "take" it or not based on the effort vs. return he expects.

[busted]

Most people don't need to surrender any personal one huge ol' asset on your books, the $250k that is owed to you.

Sorry I haven't been here in a while. I am just so sick over this mess, I can barely function. Dh is stil in CA picking up his stuff and some things he had in storage. He is debating on if he should go confront the business partner at all and what he should even say to him. We are both walking on pins and needles over this case because there are so many unanswered questions. My question is below after this long explanation as to why I am not sure if the $250k should even be brought up....

The question or thing about the $250k, here is the story on what happened on that transaction and why it went wrong...

After we had already invested about $200k with the con-partner, he suggested that we move to CA so that we can be close to our investments and build more businesses there. We were tired of being here in VA and running our store so we thought it would be an awesome idea to make the move, I mean we had invested all of this money and were expecting a huge return (these stores always give huge returns in a normal situation, in our case when we got to CA the con-partner had already sunk them so far into a whole that there was no way to get them back up to health, but thats another level to this whole mess), with that said...

We sold our store to one of our employees who was a very close and personal friend. She and her husband are from out of the country and had been with us since opening. We helped them get a SBA loan, my dh had a broker on the deal but we are the ones who did all the work.

They only qualified for $825,000.00 and the price of the store was $950,000.00 (these stores sell either by gross sells or cash flow or earnings) the bank appraised for over $1,000,000.00 but they were only willing to loan the them $825,000, at this point we agreed to take a note with them for the remaining balance AND my dh put the 20% dwn payment for them [SEE BELOW], they were like family and we didn't mind taking a note.
The PROBLEM is that we never got a promissory note signed. My dh waited untill after the SBA closed because he was trying to make sure that the note would be financially duable for the buyers. After the SBA closed and they took over the store, they decided that they didn't feel that the store was worth that amount and said that they would not pay us the remaining amount.


20% dwn:
For the SBA they needed 20% dwn which they didnt have [this monies could not be a loan so the broker suggested that HE put the 20% dwn in exchange to have 15% ownership (on paper) to the store AND the 20% dwn payment came out of the funds to us at closing straight to the broker's pocket. BAM, we're out that money PLUS the remaining balance on the price of the store.

Dang are we stupid or what! Is this confusing enough for you guys cause just typing it is making my head spin.


My question is:
Should we make our bk drag on for a lengthy amount of time for something that was never even documented? How long will it drag on? How will we be about to move forward in business with a bk case open, surely we will not be able to make a large amount of money till after the case is closed, right? We are ready to move forward in business and dont want a bk to be stopping us from making our money back. What should we do. I feel so desperate