Any small business owners (sole prop) in Ch 13?

[Lisa68]

We are preparing to file Ch 13 (so that we can keep our house and business). We owe a few of our vendors (not nearly as much as we owe our CCs, though) and our lawyer says we have to include those when we file, but that somehow (I wasn't clear on this part), we can make arrangements to pay them in full, so that they will continue to do business with us (though I don't think any will extend us credit).

Anyone else go through this? What was your experience? Our lawyer said we can continue paying our vendors, but don't pay any large amounts (over $600). Also, we don't need to include business rent, right, since it's not a debt?

Thanks for any info you can give.

Lisa

[mtngirl47]

We have a C corp and filed Chap 13 Personal but included all the business credit cards that we had personally guaranteed. Since you haven't filed yet, use this time and PLAN!

Stop paying your credit cards. Communicate with all of your vendors--business slow down, you can make small (less than $600 payments) and get them caught up before you file. Then they won't even need to know that you've filed and you will probably be able to keep your accounts open.

Not sure what kind of business you're in...but we've changed our buying habits...we don't buy several cases--just one at a time and pay for it right then. (We lose the "discounts" but hey, we used to get the discount and then ended up paying interest on the danged credit cards!) Plus, since the 13 I've been spending much more time shopping for better deals. I found I was in the habit of buying from the same folks, because I always had. Now that I'm shopping harder I've been able to reduce our costs on many items.

Rent, phone, utilities are expenses, not debts. Get and keep them current. During your planning, preparation time make sure your accounting is up to date and that your personal & business money are as separate as possible. Keep all receipts so you have all the info you need to file. Make sure you have properly depreciated all of your assets...those computers you have aren't worth what you paid for them, etc.

Read thru these forums and you'll find tons of great advice on how to make this business decision work for you.

[Lisa68]

Sorry it took me so long to get back to this. Thanks so much for the information.

Do you know how often the $600 payment thing is? My atty wasn't clear on that (she implied it was not etched in stone). We have been making small payments to our vendors, $300-$400, but it's per week. We *have* to pay them weekly or we cannot stay in business (can't get new merchandise). Anyone have a clarification on this?

Thanks,
Lisa