First post, my story of woe...

[10534E]

So, I'm partners in a business in NV. We are baiscally a franchise from a Ca business. We hae 6 years remaining on our agreement with the parent company.

We have purchase goals set by them that if are not met, we pay a penalty. In these economic times, we are missing our goals and business is rough.

Looks like they are looking to collect from the last two years in the amount of $70K combined. Our main concern is that even if we can afford to pay this amount, it doesn't look like things are going to get better anytime soon. So, we'll be in a worse situation for the next few calender years.

We purchased our building a few years back and are upside down about $700K.

We are current on all our bills and mortgage. No vendors have ever been paid late, we have been fine with everyone including our parent company.

Basically, we've had enough. We can't afford to pay the past penalties nor the future ones.

We personally guaranteed for our purchase agreement and for the building.

We're thinking Ch7 is the way out. The only deptors that we would list would be the parent company and the bank our mortgage is held through.

The parent company would not only be going after the 70K, but also for the remaining 6 years on our agreement which would be about another $600K.

What are we in for?

[LadyInTheRed]

We're thinking Ch7 is the way out.

Sounds likely.

The only deptors that we would list would be the parent company and the bank our mortgage is held through.

I assume you mean creditors. If you have any other creditors, you have to list all of them. You don't get to pick and choose.

What are we in for?

A financial fresh start! To learn more details on how you get there, read posts on this board, including the stickies, and ask some specific questions. Also, make appointments for free consultations with 2 or 3 experienced bankruptcy attorneys. This board will provide a lot of help, but is no substitution for the advice of an attorney.

Welcome to BKForm!

ETA: I noticed that you posted the same question twice. I deleted the other post. Please do not post the same question in two forums. If you accidently post a question in the wrong forum, report the post by clicking the triangle below it and request that it be moved. Thanks.

[despritfreya]

Welcome to the Forum.

I assume the business is run through an entity (corp or llc) and that you have personally guaranteed the franchise agreement and any other installment type loan of the business. I assume the building will eventually be foreclosed as there is no equity. I further assume that you do not intend to start up a new business, similar to the old one, free of the hold the franchise agreement has on you. Lastly I assume you have little in the way of non-exempt assets that a Chapter 7 Trustee can get his hands on.

If all of my assumptions are correct then yes, I believe you would be looking at a Chapter 7. Lady is correct. You will get a "fresh start". And, yes, you list ALL of your debt. This would include any business debt that you are responsible for, your personal credit cards, medical bills, loans (secured and unsecured) etc. Everything is listed. Certain obligations you will continue to pay such as a vehicle loan if you want to keep the vehicle.

Your next step (besides spending time here) is to consult with one or more local bk attnys. Consultations are usually free.

Des.

[AngelinaCatHub]

My heros, Des and LIR.

You know, once I had a little side dream after a long retirement to get a little hot dog stand. You know, the little pull trailers you pull with a car and has an umbrella over it. Here is what I found out. For a $1.25 hot dog, I had to have a sink, with soap, a heater for all things hot, and an OSHA permit, two licenses, a City and a County, some sort of health permit, a rent in parking place, a bond, proof of insurance, and on.

How do you make money in this Country? It would have taken me half of the year of income if I could even make income to pay for the privilege to work. No wonder the entrepreneurs in this Country just give it up. No wonder we are in this Depression (don't give me crap we are in any kind of recovery from a Recession).

I wonder how our Country would be greater if we did not kill off our inspirations with regulations.

BTW, welcome to our OP.

PS your vote this year is more important that winning the World War. Use it wisely. 'Hub

[despritfreya]

How do you make money in this Country? It would have taken me half of the year of income if I could even make income to pay for the privilege to work. No wonder the entrepreneurs in this Country just give it up. No wonder we are in this Depression

So agree and the reason I mentioned not opening a new but similar business is that darn franchise agreement has a "non compete"clause which will survive the bk and be completely enforceable unless some court determines it to be over-broad.

Des.

[jacko]

What regulations are killing one's inspirations?

My heros, Des and LIR.

You know, once I had a little side dream after a long retirement to get a little hot dog stand. You know, the little pull trailers you pull with a car and has an umbrella over it. Here is what I found out. For a $1.25 hot dog, I had to have a sink, with soap, a heater for all things hot, and an OSHA permit, two licenses, a City and a County, some sort of health permit, a rent in parking place, a bond, proof of insurance, and on.

How do you make money in this Country? It would have taken me half of the year of income if I could even make income to pay for the privilege to work. No wonder the entrepreneurs in this Country just give it up. No wonder we are in this Depression (don't give me crap we are in any kind of recovery from a Recession).

I wonder how our Country would be greater if we did not kill off our inspirations with regulations.

BTW, welcome to our OP.

PS your vote this year is more important that winning the World War. Use it wisely. 'Hub

[LadyInTheRed]

Please don't take this thread off topic into a political discussion. If you want to continue that part of the conversation, take it to the "General Talk" forum.

[10534E]

Thanks for the welcome, and Yes, Lady in Red, I screwed up on that first post in the wrong section, sorry about that, it won't happen again...

[10534E]

Welcome to the Forum.

I assume the business is run through an entity (corp or llc) and that you have personally guaranteed the franchise agreement and any other installment type loan of the business. I assume the building will eventually be foreclosed as there is no equity. I further assume that you do not intend to start up a new business, similar to the old one, free of the hold the franchise agreement has on you. Lastly I assume you have little in the way of non-exempt assets that a Chapter 7 Trustee can get his hands on.

If all of my assumptions are correct then yes, I believe you would be looking at a Chapter 7. Lady is correct. You will get a "fresh start". And, yes, you list ALL of your debt. This would include any business debt that you are responsible for, your personal credit cards, medical bills, loans (secured and unsecured) etc. Everything is listed. Certain obligations you will continue to pay such as a vehicle loan if you want to keep the vehicle.

Your next step (besides spending time here) is to consult with one or more local bk attnys. Consultations are usually free.

Des.

You're good. Right on all counts.

As far as listing debt, we really don't have any. Pay off balance on CC every month, no medical bills, current on mortgage, no other debt. Current on everything. I just need to get out of our franchise agreement and away from the commercial building that is upside down. That's why I'm looking towards the CH7. Both are long term contracts and could be very costly in the long run.

I'm not really looking forward to ruining my 800+ credit score, but I will recover.

I do have an appointment to meet with the BK attorney next week, (unfortunatly, not a free one).

I'm just doing as much research as I can now to be prepaired, that's how I came across this forum.

Thanks for the info!

[oregonpilot]

Welcome E...glad you found us.
this is a great place to get prepared for that first atty visit. or 2nd or 3rd. AND for everything that follows.
Lots of awesome peeps here.