Please read-need advice on bk for personal and co.

[Lovesgirl]

my husband and I own a graphic design printing company that operates as a dba of our main company which doesn't do much anymore. Used to sell toner cartridges, etc. But hardly any customers anymore. We have done ok with the printing company but the industries we sell to have been hit hard by the economy and the past year has been bad, the last several months has been really bad.

we are a corporation which converted at some point to either a S or C corp, whichever one makes you like an LLC. We pay ourselves practically nothing, about $20,000 each per year. We used to use the credit cards for travel and paying vendors who wanted payment up front. We quit doing that but had to start using the cards for everyday living like food, gas, occasional meal out, etc. We also pay a lot of our personal expenses thru the company but mark it personal as loan to officer and at tax time our CPA records it as dividends to officers as income and we pay taxes if needed. We pay the credit cards that we have from the company account which amounts to about $1600 a month in just minimums and they are all about 5 or 6 near their limits. Some have just my husbands name and some have his name and the company name on them. Usually he does $40,000-$60,000 a month in gross sales. But the past year it is declining. The past few months he has only been able to sell $15,000 - $20,000. Well our "overhead" for the company (including personal overhead) is about $15,000. that includes mortage $1300, group medical policy $600, power $300, phones $300, cells $200, water $25, gas $50, sales tax, 941 tax, payroll taxes, long distance $300, as well as the credit card minimum payments. Myself, I used to have about 7 or 8 cards totalling about $30,000 which I sent to CCCS and doing well with that, they take $801 of my about $1400 a month net income. The rest I use to buy groceries, pay doctor visits, buy prescriptions, gas, etc. But it goes quick when you take $801 out. I have started using my husbands personal account to start paying more of the "personal" stuff directly but he only nets about $1200 a month too.

So we are doing enough sales to pay "just" the overhead which means we are behind on some vendors. Some as much as $13,000 (which is probably about 5 or 6 invoices). We have been paying whoever we have to when we send them a job and they say, you have to pay this invoice first or we can print and ship that job. We have a couple of kind vendors who understand this situation is going to improve and they keep letting us send jobs over without paying upfront.

I have been trying to reduce any bills I can. But everything has you bound by a contract for X more months and if you terminate, they charge you all that upfront. I can't seem to reduce the cell phone bill any, haven't tried the regular phones course I may can drop some lines, don't see the long distance changing cause almost all our customers or potential customers are long distance. Business is picking up just the last few weeks.. We can see it, so can other businesses like ours.

We owe $211,000 on a house we bought for $225,000 4 years ago that is made up of two mortgages totaling $1600. We have a car that we bought for $24,000 and owe $17,000 and the payment is like $524. We have a 2000 4 runner that we bought for $7,000.

We work out of our house and our business "assets" are minimal. I have an old G4 mac (which I'd gladly give up) and a imac maybe a year or two old. One pc that is really old. Three printers and a scanner. I could do without a printer or two. And he and I both have desks with bookcases, file cabinet. Two office chairs. One desk I paid for out of pocket so I consider it mine.

Thought one: we could send all the cards of his to CCCS, but if we do, are the ones with company name gonna be refused cause they are co. cards?
If they base payment off what he makes, the payment should be reasonable. I've done well and should be out of debt in about 2 more years.

Thought two: we could file personal bankruptcy, both of us. That would free up $800 a month for me to pay personal bills. It would take the burden of $1600 a month off our company overhead that it has been paying. or would those co. cards go on the company anyway?

Thought three: we could just "close" the company, tell creditors we are out of business and start over, create a new company name as a LLC and use the vendors who will work with us. Still draw the same paycheck, etc. If we do that will like the medical insurance company drop us cause the co name on the bill is "closed"? or can we just keep paying it? Won't just closing, leave us open for creditors to sue the company which has practically no assets, or sue my husband even though we are a corp/llc for personal assets?

Thought four: we could go personal bankrupt, which really only gets us out of a couple credit cards (if the ones with company names go toward the company). But it would protect our personal stuff I guess from business creditors right? and we could just try to keep the business going til we have to give up on it (worst case scenario) and then bankrupt it.

Thought five: we could go business bankrupt but not sure if we should do reorganization or complete bankrupt. If the bills we currently owe in the company go away, as well as the credit cards go away, that is some burden released. But if the sales don't pick up we'll be back in the same situation soon again.

Jobs are not that easy to find around here either. I am a secretary/graphic designer who has worked for her husband for the past 8 years. and my husband has only sold office supplies or this printing stuff.

So if we lose the company and our jobs and that would include our medical insurance (and we are both on lots of meds and go to the dr all the time), we are not likely to find jobs anytime soon. So we are talking complete upheaval here of our lives. no company, no jobs, lose house and cars, and stuff, and now if we find jobs we have to be apart and when we've been together 24/7 for 8 years?? and be without my dog all day when I'm with him 24/7 for 6 years? and rent a house that will cost close to the same as our mortgage if we get one big enough to have offices and work out of?

My and my husband are both overwhelmed. Yesterday I got taken to the emergency room for a psychiatric evaluation for depression, panic attacks and crying fits cause we found out our bank turned us down for a loan due to too much credit card debt - income to debt ratio. I am on paxil, klonopin, adderral, and ambien. I can't take much more. The thought of losing EVERYTHING is overwhelming. If we were just losing the company and both had other jobs lined up, we'd survive. But this is everything. at once.

Another worry I have is about my wedding ring. It is an odd unusual cut which has a lot of clarity and with the bands the retailer appraisal for the insurance is about $24,000. I am worried they will take it. It's my wedding ring for gosh sakes! That should be against a religious rule or something. I'm sure if I tried to sell it to pay bills the most I"d get is probably $2000 cause for more than that you can buy a HUGE rock in normal cut like an emerald cut or a solitaire (mine is kinda small visually because of the special cut).

And I worry about if we bankrupt the company or personal, will our bank that has our company acct, and our personal accounts, close them alll down? if they do and we set up a new company, how will we get an account for the new business? How will I cash my new paycheck with no account? Will the phone company see we are bankrupt and shut off our phones? What problems will we have in setting up a new company with a company and/or personal bankruptcy? and if it takes months to set up, how will we live in the meantime cause of course the credit cards would be gone, accounts frozen, no jobs coming in yet and if they take my mac and the pc, we have no way to even make the money to pay us paychecks, pay the medical insurance, etc. and no credit to buy new equipment.

We also just set up our merchant account with our bank because paypal sucks. If we close or bankrupt the company, will they give us a new merchant account? Without it, we can't charge anyone's credit card and that is how most of our customers/companies pay us.

Another worry is that I only maintain 1 credit card after sending all mine to CCCS and it is CareCredit. I owe $0 on it and when I have a charge, really small ones, I pay it off within a month or two. It is just for the vet in case something happens to our little one. I wonder if they will close it if we personal bankrupt? Do you think if I called them first, they will allow me to keep it?

Is it possible for just my husband to do personal bankruptcy since his name is on everything and mine is only on the 2000 4 runner? if we do that, is there a way for me to stop paying the $801 a month to CCCS without filing bankruptcy? and if the attorney does recommend for us to go bankrupt personal for both of us, how do I stop the auto debit from CCCS? I guess if I close the account that would do it huh? I've worked so hard to pay that debt off, it would be disheartening to do a bankruptcy now. But we could really use that $800 a month to go on these personal bills/mortgage.

Any advice from anybody on anything is very very welcome. I have never been so stressed in my life and am not good at handling worries and problems as it is.

We are meeting with a bankruptcy attorney Monday for just a consultation/backup plan so I've love advice before then from someone who has been thru some of this.

[jadams]

You need to do something if it's causing your health problems.

Am I understanding correctly that the corporation basically has no assets (i.e. just a normal PC and printer or two, a normal scanner -- nothing like a $20,000 plotter or a $15,000 blue print scanner)?

That makes it basically like a consulting type business, where the corporation/business's biggest asset is you and your husband working for it?

My suggestion would be to get in touch with a lawyer and see about doing a joint filing for you and your husband and a CH-7 on the corporation if the lawyer deems it necessary (lots of times insolvent corporations are left to just exist since no discharge is granted to corporations).

How are the rest of your assets looking? Would you pass a means test?

If you could liquidate the business in a CH-7, discharge your debts in a personal CH-7, there's nothing stopping you from booting the computer back up and starting a new business (essentially same business, just new corp).

Printing companies may refuse to deal with you if you BK a balance before, but you should have enough to choose from to work around anyone that gives you a hard time.

[jribe]

very long post to sift through, but i'll give a few comments... First of all- what state are you in? That will determine your exemtions. On the wedding ring- they don't exempt it because it's a wedding ring. I know, it sucks. However, if it really is valued at 24k- you'll need to value it as such. How many carats is it? How long ago was the appraisal? The trustee would likely take a ring worth so much unless you can cover it in exemptions.
Same thing with the paid off car. Basically you inventory everything you own (wholly paid for or not) and list it. If there are things you can't cover in your exemptions; you have two options: 1. let it go. 2. Pay for it from the trustee.

As for the business- you should really consult a good business BK lawyer to give you more details on what you can do.

It sounds like the business itself doesn't have too much debt. But on the personal side you and your husband do.

Have you taken the means test at all? If you google "legal consumer means test" i have found that one to be quite good.

It will have you enter in your income for the last 6 months along with expenses (it will say what can be included and what cannot be- certain things you can only claim so much, even if your actual expense is more). You can always deduct healthcare, and taxes. Usually a certain amount for a car payment, some for mortgage/rent, food (set expense) etc.

Take a look at that and see where you stand. I can tell you're obviously very distraught. Don't be. This is a business decision. You do what you have to do. There are many here that took many months to properly plan for their BK. You are in no rush. Even with no paying the cards- most people go 6-16 months without getting even a threat of suit. Don't worry so much, breathe!

my husband and I own a graphic design printing company that operates as a dba of our main company which doesn't do much anymore. Used to sell toner cartridges, etc. But hardly any customers anymore. We have done ok with the printing company but the industries we sell to have been hit hard by the economy and the past year has been bad, the last several months has been really bad.

we are a corporation which converted at some point to either a S or C corp, whichever one makes you like an LLC. We pay ourselves practically nothing, about $20,000 each per year. We used to use the credit cards for travel and paying vendors who wanted payment up front. We quit doing that but had to start using the cards for everyday living like food, gas, occasional meal out, etc. We also pay a lot of our personal expenses thru the company but mark it personal as loan to officer and at tax time our CPA records it as dividends to officers as income and we pay taxes if needed. We pay the credit cards that we have from the company account which amounts to about $1600 a month in just minimums and they are all about 5 or 6 near their limits. Some have just my husbands name and some have his name and the company name on them. Usually he does $40,000-$60,000 a month in gross sales. But the past year it is declining. The past few months he has only been able to sell $15,000 - $20,000. Well our "overhead" for the company (including personal overhead) is about $15,000. that includes mortage $1300, group medical policy $600, power $300, phones $300, cells $200, water $25, gas $50, sales tax, 941 tax, payroll taxes, long distance $300, as well as the credit card minimum payments. Myself, I used to have about 7 or 8 cards totalling about $30,000 which I sent to CCCS and doing well with that, they take $801 of my about $1400 a month net income. The rest I use to buy groceries, pay doctor visits, buy prescriptions, gas, etc. But it goes quick when you take $801 out. I have started using my husbands personal account to start paying more of the "personal" stuff directly but he only nets about $1200 a month too.

So we are doing enough sales to pay "just" the overhead which means we are behind on some vendors. Some as much as $13,000 (which is probably about 5 or 6 invoices). We have been paying whoever we have to when we send them a job and they say, you have to pay this invoice first or we can print and ship that job. We have a couple of kind vendors who understand this situation is going to improve and they keep letting us send jobs over without paying upfront.

I have been trying to reduce any bills I can. But everything has you bound by a contract for X more months and if you terminate, they charge you all that upfront. I can't seem to reduce the cell phone bill any, haven't tried the regular phones course I may can drop some lines, don't see the long distance changing cause almost all our customers or potential customers are long distance. Business is picking up just the last few weeks.. We can see it, so can other businesses like ours.

We owe $211,000 on a house we bought for $225,000 4 years ago that is made up of two mortgages totaling $1600. We have a car that we bought for $24,000 and owe $17,000 and the payment is like $524. We have a 2000 4 runner that we bought for $7,000.

We work out of our house and our business "assets" are minimal. I have an old G4 mac (which I'd gladly give up) and a imac maybe a year or two old. One pc that is really old. Three printers and a scanner. I could do without a printer or two. And he and I both have desks with bookcases, file cabinet. Two office chairs. One desk I paid for out of pocket so I consider it mine.

Thought one: we could send all the cards of his to CCCS, but if we do, are the ones with company name gonna be refused cause they are co. cards?
If they base payment off what he makes, the payment should be reasonable. I've done well and should be out of debt in about 2 more years.

Thought two: we could file personal bankruptcy, both of us. That would free up $800 a month for me to pay personal bills. It would take the burden of $1600 a month off our company overhead that it has been paying. or would those co. cards go on the company anyway?

Thought three: we could just "close" the company, tell creditors we are out of business and start over, create a new company name as a LLC and use the vendors who will work with us. Still draw the same paycheck, etc. If we do that will like the medical insurance company drop us cause the co name on the bill is "closed"? or can we just keep paying it? Won't just closing, leave us open for creditors to sue the company which has practically no assets, or sue my husband even though we are a corp/llc for personal assets?

Thought four: we could go personal bankrupt, which really only gets us out of a couple credit cards (if the ones with company names go toward the company). But it would protect our personal stuff I guess from business creditors right? and we could just try to keep the business going til we have to give up on it (worst case scenario) and then bankrupt it.

Thought five: we could go business bankrupt but not sure if we should do reorganization or complete bankrupt. If the bills we currently owe in the company go away, as well as the credit cards go away, that is some burden released. But if the sales don't pick up we'll be back in the same situation soon again.

Jobs are not that easy to find around here either. I am a secretary/graphic designer who has worked for her husband for the past 8 years. and my husband has only sold office supplies or this printing stuff.

So if we lose the company and our jobs and that would include our medical insurance (and we are both on lots of meds and go to the dr all the time), we are not likely to find jobs anytime soon. So we are talking complete upheaval here of our lives. no company, no jobs, lose house and cars, and stuff, and now if we find jobs we have to be apart and when we've been together 24/7 for 8 years?? and be without my dog all day when I'm with him 24/7 for 6 years? and rent a house that will cost close to the same as our mortgage if we get one big enough to have offices and work out of?

My and my husband are both overwhelmed. Yesterday I got taken to the emergency room for a psychiatric evaluation for depression, panic attacks and crying fits cause we found out our bank turned us down for a loan due to too much credit card debt - income to debt ratio. I am on paxil, klonopin, adderral, and ambien. I can't take much more. The thought of losing EVERYTHING is overwhelming. If we were just losing the company and both had other jobs lined up, we'd survive. But this is everything. at once.

Another worry I have is about my wedding ring. It is an odd unusual cut which has a lot of clarity and with the bands the retailer appraisal for the insurance is about $24,000. I am worried they will take it. It's my wedding ring for gosh sakes! That should be against a religious rule or something. I'm sure if I tried to sell it to pay bills the most I"d get is probably $2000 cause for more than that you can buy a HUGE rock in normal cut like an emerald cut or a solitaire (mine is kinda small visually because of the special cut).

And I worry about if we bankrupt the company or personal, will our bank that has our company acct, and our personal accounts, close them alll down? if they do and we set up a new company, how will we get an account for the new business? How will I cash my new paycheck with no account? Will the phone company see we are bankrupt and shut off our phones? What problems will we have in setting up a new company with a company and/or personal bankruptcy? and if it takes months to set up, how will we live in the meantime cause of course the credit cards would be gone, accounts frozen, no jobs coming in yet and if they take my mac and the pc, we have no way to even make the money to pay us paychecks, pay the medical insurance, etc. and no credit to buy new equipment.

We also just set up our merchant account with our bank because paypal sucks. If we close or bankrupt the company, will they give us a new merchant account? Without it, we can't charge anyone's credit card and that is how most of our customers/companies pay us.

Another worry is that I only maintain 1 credit card after sending all mine to CCCS and it is CareCredit. I owe $0 on it and when I have a charge, really small ones, I pay it off within a month or two. It is just for the vet in case something happens to our little one. I wonder if they will close it if we personal bankrupt? Do you think if I called them first, they will allow me to keep it?

Is it possible for just my husband to do personal bankruptcy since his name is on everything and mine is only on the 2000 4 runner? if we do that, is there a way for me to stop paying the $801 a month to CCCS without filing bankruptcy? and if the attorney does recommend for us to go bankrupt personal for both of us, how do I stop the auto debit from CCCS? I guess if I close the account that would do it huh? I've worked so hard to pay that debt off, it would be disheartening to do a bankruptcy now. But we could really use that $800 a month to go on these personal bills/mortgage.

Any advice from anybody on anything is very very welcome. I have never been so stressed in my life and am not good at handling worries and problems as it is.

We are meeting with a bankruptcy attorney Monday for just a consultation/backup plan so I've love advice before then from someone who has been thru some of this.

[falken]

You need to get all of your information together in nice easy to read spreadsheets and make 4-5 apointments with BK attorneys in your area.
This is the only thing that is going to give you a real good idea of what your options are. When you throw a business in to the mix, things get complicated fast.

I won't give any specific advise, but I will point out a few things:

You can't just file personal BK and keep the business all seperate. The business is an asset of yours, the business accounts, any property owned by the business, etc.

Chances are you personally guarenteed most if not all of the business credit cards so if you file a personal BK they have to all be included and will be closed, however, the credit card company can still go after the company for the balance if it is still in business.

If you file business BK (or just close the business), all your business cards will go in to default and you personally will be liable to pay the balance. You would however be able to escape most of the vendors past due invoices as chances are you signed no personal guarentee with them.

If you closed the business, then filed personal BK, nothing would stop you from opening another business but now your personal credit is showing a BK, and your business is brand new, so you are not going to be getting much credit (and none anywhere you filed BK on), so you need to make sure you can run the business without credit.

Your wedding ring is only worth what someone will pay for it. Take it to several pawn shops and see what they will give you for it, if they really will give you $24k its a problem. If they offer more like $2k, its much less of a problem.

Once agian, the best thing you can do for your health is to make several apointments with attorneys and go over your options.

Good luck!