Do you talk to your banker first or a lawyer?

[leigha]

I'm new to this whole situation but can't deny the problems any longer. My husband's business just doesn't make enough money to pay the monthly bills or especially to pay down the huge loan amount. If we go talk to the banker and admit defeat basically, will he freeze the account which is already overdrawn? I don't even know where to start and feel so hopeless, especially since his widowed mother cosigned for $100,000. I assume she really will have to pay this?

[MSbklawyer]

I'm new to this whole situation but can't deny the problems any longer. My husband's business just doesn't make enough money to pay the monthly bills or especially to pay down the huge loan amount. If we go talk to the banker and admit defeat basically, will he freeze the account which is already overdrawn? I don't even know where to start and feel so hopeless, especially since his widowed mother cosigned for $100,000. I assume she really will have to pay this?

You definitely want to talk to the lawyer first. Why give your creditors a head start on getting judgments, freezing accounts, seizing assets &c. ?

But if your banker does freeze your overdrawn account, so what? What's to freeze? Just don't put anymore money in there.

As for his mom, she may or may not really have to pay it. There could be 1000 things that factor in to answering that question.

Where you start is what you've already done: coming to grips with the fact that there is a problem. But you should understand, that bankruptcy offers relief from debt problems. Having insufficient income to pay your ongoing bills is an income problem that bankruptcy cannot address. Debt problems and income problems often go hand-in-hand, but they require different approaches.

Find a good bankruptcy lawyer ASAP.

Good luck.

[mikeinsurpri]

I would recommend talking to a bankruptcy lawyer first to find out your options. When we started realizing that we didn't have enough money because bills, credit cards, etc were too high we spoke with our financial adviser who suggested a 401K loan. Let me tell you that was a mistake cause after researching and meeting with lawyers we found out that the 401K was exempt and they couldn't touch it. I guess for us it was a $20K learning experience.

[frogger]

Attorney first!

[leigha]

You definitely want to talk to the lawyer first. Why give your creditors a head start on getting judgments, freezing accounts, seizing assets &c. ?

But if your banker does freeze your overdrawn account, so what? What's to freeze? Just don't put anymore money in there.

As for his mom, she may or may not really have to pay it. There could be 1000 things that factor in to answering that question.

Where you start is what you've already done: coming to grips with the fact that there is a problem. But you should understand, that bankruptcy offers relief from debt problems. Having insufficient income to pay your ongoing bills is an income problem that bankruptcy cannot address. Debt problems and income problems often go hand-in-hand, but they require different approaches.

Find a good bankruptcy lawyer ASAP.

Good luck.

I come to grips daily now, usually about 3:00 am if you know what I mean. It is the business income that can't pay the business debt. Actually, personally we were okay, if you separate business and personal. Our house is paid for (but now rolled into the business loan) and our car and daughter's car are paid for. Will this help or hurt us??

[MSbklawyer]

I come to grips daily now, usually about 3:00 am if you know what I mean.

Precisely.

It is the business income that can't pay the business debt. Actually, personally we were okay, if you separate business and personal. Our house is paid for (but now rolled into the business loan) and our car and daughter's car are paid for. Will this help or hurt us??

But your house isn't paid for, in any real sense, because it stands as collateral for a business loan. Even if you close the business, if that loan isn't paid, the lender will foreclose on the house just as if it were a standard mortgage on the house. In that respect, you can't separate business and personal. If there is other business debt that you are personally liable for then a bankruptcy may help, but it's not going to get rid of the debt on the house. Is it your plan to keep the house?

[leigha]

I'm just so new to this. What is likely to happen then? I don't even know - should I be reading about Chapter 7 or 11?? I feel so lost and alone. Are there any blogs out there that would help me through this?

[wonderingrov]

I'm just so new to this. What is likely to happen then? I don't even know - should I be reading about Chapter 7 or 11?? I feel so lost and alone. Are there any blogs out there that would help me through this?

This is really one of the core issues you need to discuss with a lawyer. There are a lot of them out there that will give you a free consultation. Schedule a few consultations with lawyers - they can look at your specific situation and advise you as to which would be the best chapter to file. This is where the legal advise of an experienced bankruptcy lawyer is invaluable.