New looking for advice.

[rogue182]

[mtbc]

Obvious initial questions: How much equity do you have in your house? Any idea how much your business is actually worth? Which state are you in?

[rogue182]

Equity, maybe $10K.

My business is internet based so I would consider its value to be equal to the inventory, about $10K.

New Hampshire

[Mensa1]

Equity, maybe $10K.

My business is internet based so I would consider its value to be equal to the inventory, about $10K.

New Hampshire

You didn't mention your house in the reply but I would assume that you have less than the exempted amount of 50K for NH.

You mentioned that you are "in the middle of restructuring your mtg", so does that mean refinancing or modifying? Seems like yiou wouldn't be a candidate for a refi right now, unless you are with a small bank that is helping you out with new terms, etc.

NH exempts 5K for tools of trade, not likely including inventory, but what type of inventory do you have? Could it in any way be determined to be a tool of your trade? Also when you mention 10K of inventory, is that the amount that you could sell it for tomorrow, wholesale liquidated price, or retail value when if and when it is all resold? Looking for value that the court could sell the property for.?

But back to you original question, a Ch 7 will eliminate the CC and business debt, as well as the liquid assets of your business. You may be able to structure a way to buy those assets back from the T'ee over time, like a year or more, int free. It happens all the time. That way you would essentially have a 10K loan to T'ee and no cc or bus debts. You should be able to pay that 10K off pretty quick since you have been servicing the big number debt on a current basis.

So sounds like you keep house and business with a small debt to T'ee and life goes on, only better.

[rogue182]

My home equitey is about $10K and yes we are currently having the loan modified.

My inventory is in antique collectables and the value I stated was based on what I paid. It I had a fire sale tomorrow I could get maybe $8K.

[Mensa1]

Then 8K is the value that you need to concern yourself with as to the Bk. Maybe you could get appraisals for even lower value.

As stated, the T'ee will likely allow you to maintain the inventory and purchase from the Bk Estate, with payments over time. That way your business could survive and keep whatever income you have established. There is no value for goodwill in any business, as might be in the sale of a business.

[pileated]

My husband has a sole proprietorship, and if the Trustee took his inventory, it would mean we would have no income.

Then I realized that, as a sole proprietor, his inventory is personal property. Thus, he is exempting it as personal property. We don't have much personal property: office furniture and computer, inventory, household furnishings, clothing, 2 old cars, so we actually have wiggle room. We don't have a house because it was recently foreclosed on.

As far as the value of the inventory is concerned, our attorney said the value was what we could get for it if we sold it as one lot. That is much less than what we paid for it. My husband tried to sell it last year, in desperation, and could not find a buyer. If we just meandered along with our business, it would take 6 years to sell all the inventory (based on sales history) and even then, a lot of it would not be sold (IMO). So, for BK purposes, the value of the inventory is much less than our book value.

So, I'd keep in mind that inventory is personal property and I'd value it at what it could be sold for quickly. Of course, you should consult with an attorney about this -- I am not qualified to give you legal advice.

[rogue182]

Thank you everyone for your advice. It is nice to know I note the only one dealing with this. I had been holding off telling my wife until after my first meeting with a lawyer, but I can't really keep anything from her. After 29 years she reads me pretty well. She asked me today if something was bothering me, so I told her that I was considering BK. Her reaction blew me away. She was very supportive, I think she accepted the realization better than I did. I feel like a complete looser, like I have let my family down. But she reaffirmed her love for me and said she was glad that there was a way for us to get out of this mess. She said she had seen my stress level grow over the past two years and that she was willing to go though this very difficult process to give us a fresh start.

Thanks Again,
John

[momofthree]

I don't know if you're aware of this, so I'll throw it out there just in case. If at all possible, you should wait until your mortgage modification is made permanent before filing bk. Once you file, most banks automatically cancel out your mod and tell you to re-apply once the bk is discharged...

[rogue182]

Thank you for the advice.

[frogger]

Her reaction blew me away. She was very supportive, I think she accepted the realization better than I did. I feel like a complete looser, like I have let my family down. But she reaffirmed her love for me and said she was glad that there was a way for us to get out of this mess. She said she had seen my stress level grow over the past two years and that she was willing to go though this very difficult process to give us a fresh start.

With a wife like this, the battle is already won. You and your family are going to do fine. Good luck.