Looking for advice LLC with about 600k debt wanting to close down. Options.

[MasterOfNone]

Well I've been trying to post for a few weeks now but so much I want to say that end up procrastinating... live and work in North Carolina.


I have a failing Small business with about 650k in debt. I keep having to borrow to make it work and just decided to take my life back and stop this mess.

LLC has Sba Disaster loan for 150k and a regular 7a around (240k with liens on about 100k of vehicles) a few credit cards, lines of credit, a few equipment loans and a few MCAs that had to take out last minute.

LLC has about 280-300k in liquidable assets, it all depends how well they sell.

I decided to give up so not really interested in keeping the business going, it is profitable but due to the debt it's not breaking even at the moment.

my biggest problem is the equity in 2 houses. Primary residency about 100k and a rental property with about 200k.

also owe family member about 30k cash and wife about 20k cash

Most of the other personal assets/property have been in my wife's name (cars and small boat)

she did have to sign in the SBA 7a as spouse PG if not mistaken, I will be pulling out all the loan agreements in the next few days.


What would you all do in my situation? I would love to keep the houses that we worked so hard to pay down. 1 we got about 18 years ago and the other one 3 years ago. I'm devastated at the idea of loosing them.

1st attorney, after a brief talk suggested that I close the business and file personal BK, but worried that would loose the rental house due to PG from. Sba 7a

Suggested I sell all the assets to try to pay off the sba 7a about $240k

but I wonder about the Sba Eidl for 150k wouldn't they try to go after everything as well?

I'm about 20 days from shutting down the business and can forsee a mountain of collectors calling and filing against me.

credit cards, lines of credit, uniform service contract, auto parts store debt, SBA, etc

what's the usual timeline on summons to start showing up?

i have contemplated the idea of liquidating most of it and trying to settle as much as possible, not sure if SBA would be willing to settle.

chapter 7 ,chapter 11 or debt settlement 🤷🏻♂️😓

any comments or suggestions would be greatly appreciated.




MoN.

[despritfreya]

You mention that the business is profitable but for the debt. Do you really want to shut down? If you had the opportunity to save it, would you want to try? If you want to try to save it, you would be looking at a Chapter 11 Subchapter V bankruptcy for the entity. Did you discuss this possibility with an attorney?

If you want to shut it down, I want to point out that your business does not have "280-300k in liquidable assets (plus the vehicles)". Those assets belong to the SBA to cover the EIDL loan and/or the other SBA loan and/or the MCA loans and/or any other lender that either has a purchase money lien or a UCC1 lien.

If you walk away (nothing wrong with that) then you will need to protect yourself from all of the personal guarantees. While the SBA may work with you, the MCA creditors probably won't. The loan documents you signed probably gave the creditor permission to sue you in NY, Fl or some other state. In some instances, you agreed to a "confession of judgment". And, while numerous state attorney generals are looking into the deceitful/fraudulent practices of this type of lending, you are the one on the hook. You will need a bankruptcy at some point.

Due to your non-exempt assets, you would NEVER contemplate a Chapter 7. You are headed to either a Chapter 13 or 11 (Subchapter V). What about taxes? Did the entity owe any payroll (940/941) taxes? What about sales taxes that may flow to you personally? Do you owe any income taxes? Taxes directly impact what you must pay to your general unsecured creditors when you have non exempt assets.

You mentioned a discussion with one attorney. You need to talk to several others - ones that do not operate a bankruptcy filing mill. The point being that you have too many variables for any of us to "guide" you. A well qualified attorney who can take the time to review all of the issues is the best way to go.

Des.

[MasterOfNone]

Hi Des, thanks for replying...

Great point and questions...

yes have been loosing so much money lately and sanity that really I can't continue.

Definitely will be talking will more attorneys, I'm not really sure how chapter 13 works but will look into it. Not sure if can be done since I would technically will loose all income.

at the moment I don't owe any sales or payroll taxes... I do have a workers comp adjustment/chargeback of about 17k due to some contractors not having their own workers comp policy.

thanks again, I will be back to share anything learned from the meeting with attorneys.


MoN