what happens to a business owner cc default,repo,forclosure

Why do you believe that you will be able to stay afloat long enough to push through this? Do you honestly believe that our economic problems are so temporary that you can outlive it? If so then your beliefs are like those of most Americans today, based on an almost total lack of understanding of the seriousness of the situation we are in. This is not just a temporary recession we are currently experiencing but a deep economic meltdown. A deep depression far worse than anything we have ever experienced in the history of our nation that could well last for a decade or more. If you are in deep trouble this early on your business will not survive it. When inflation was increasing you could pay off debt easily with cheap dollars but that is no longer true. Now you will have to pay off ever increasing debt with far fewer dollars and you will have fewer resources with which to do that. Stay with it as long as you possibly can but don't rely on false hopes that you can stay afloat because you probably won't.

Don't let that second repo be voluntary. Hold on as long as you possibly can, fighting them tooth and nail every step of the way. You have nothing to lose and everything to gain. If you are talking about vehicles then they can grab those easily but if you are talking about real estate then it is an entirely different matter. You can fight them for a very long time, possibly for years. There are government programs that are beginning to help stop foreclosures. They might very well work as stop gap measures but in the end even government will not have the resources to totally stop the foreclosure problem. You need to start learning about those programs instead of just giving up.

With the kind of problems you are facing I'd say that if you have to default on anything then default on all your credit cards and use those dollars to save your home and business if it can be saved at all. Forget credit and get yourself in a cash position to the greatest extent possible. Right now and for the foreseeable future cash will be king. Grab every dollar you can and hang on for dear life.

Easy! They will end up freezing any and all bank accounts they can find and will have no problem doing so. Keep bank accounts almost totally drained of cash at all times. Stop taking checks and demand cash to the greatest extent possible. Checks are nothing but instruments of debt until they are converted to cash. Checks are only a promise to pay, nothing more. If you have to take checks then find new ways to convert them to cash. Set up new banking arrangements with banks far away from your home state where they can't be so easily found.

I don't understand what you mean when you say you won't be garnishing yourselves. Please explain that.

If you think they can't freeze business bank accounts then think again. They can do it just as easily as they can personal accounts.

You are correct in saying you won't be alone. Defaults in every sector are growing every month and we aren't even half way to the end of that spiral yet. We won't be for another year or more. People are defaulting on credit card debt, vehicle loans and mortgages at an ever increasing rate. If you are giving any kind of credit in your business now then stop it. Put your business on a cash only basis to the greatest extent possible as soon as possible. If you have to extend credit then only extend credit on the labor portion, not the materials portion. If it is your labor then that's one thing but don't give credit on the labor of employees either. They have to be paid in near term cash.

I hate so sound so gloomy because the situation we are in isn't all gloomy. There is a definite silver lining in the cloud of apparent despair we face. You just have to learn how to understand it and how to deal with it. Don't give up easily.

 

That seems to be the case in the company I work for too. The boss thinks we may be seeing a turnaround but even without the problem of depression there has always been a recession as a new president takes the reins. That is because the big money people can't be sure what he will do until things have perked along under the new regime for at least 6 months. So even without the depression we all know is going to happen we would still be in a small recession until the political scene gets figured out. That has almost always happened historically speaking and is a well accepted fact of life.

The problem is that while you probably won't get hit with a deficiency balance on the real estate you will on the vehicles.

I've already told you that they will file lawsuits and will get garnishment, liens, and whatever. That may well come much more slowly now because the courts are also getting hit with the depression and lack of cash to operate on. As a result they are doing all they can to get people to go to arbitration, mediation or whatever they call it in each state. They are having to cut staff and make do with a lot less than before. Some are even greatly delaying criminal trials due to lack of funds. So it may take them longer than normal but it will happen sooner or later.

If your business is incorporated then you might be able to escape with that intact but if not then they will go after that too.

Again, if your business is not incorporated then they can and will go after the business assets too.

You will be the defendants and you won't be garnishing anything. They will do all that to you.

Could be that will end up being your only alternative.

 

What can happen is that they get the garnishment and one fine morning a sheriff shows up at your door. He tells you that he will be your new cashier until the garnishment is satisfied. He sits at the cash register and takes in any and all money that comes into the business. He then knows exactly how much you have in your frozen bank account and exactly when to grab the funds out of that. All checks and credit card income go to the bank too so you are left with absolutely nothing to even eat on until that garnishment is satisfied. That has been known to happen in some cases. Creditors who get garnishments have a wide range of remedies in most states. Don't even dream that just because you have a business there is no remedy for creditors. They can get their money one way or another. The only kinds of business that is almost impossible to garnish are those which have no brick and mortar presence. They operate out of their homes and do such things as construction, yard work, janitorial and other things that require no physical address to operate.

All that depends on what type of BK you file.

Good luck!

You and probably millions of others are laboring under that same and other delusions. Obama does not have the power or the ability to pull us out of this one. It isn't just the U.S. that is in the meltdown. Every other nation on the face of the earth is in even worse shape than we are. Any president or administration would easily have the ability to pull us out of any recession but not a global economic meltdown. We are the number one economy in the world because we have the world's strongest currency and an economy that can pull out of any recession. Japan is the second strongest economy and the Yen is the second strongest currency. After that its just about anybody's guess as to which currency is most likely to go down the tubes next. China might be a poor third.

Just look at our stock markets and what has happened there during the last year. It has lost almost half of it's value compared to what it was a year ago. It is now in the low 8,000 range and another year may well see it in the low 4,000 range.

I know a family where both parents just got new jobs. They have 4 kids, now all in their teens or older. I spent Christmas eve with them. The mother is a licensed realtor and just got a new job in a small town about 80 miles away. She is working in a government funded program to build 25 new homes for the poor which will be financed by the government with a 1% fixed interest rate. She gets $80 a day just to drive back and forth to work plus a big salary. But there is a huge potential problem that could put her back out of work again. The government grant to build those homes hasn't come through yet. Just some preliminary money to get things set up. But that grant money may or may not actually get funded and the whole project could easily go up in smoke.

Her husband has a new job with a small construction company at a good wage. They have work right now but with new housing starts slumping badly and consumers afraid to borrow that may not last long either. But they spent big on Christmas. New expensive bicycles for their only daughter and a close friend of hers. New high tech cell phones for the whole family and the parents have to pay for the service too. New Ipods and all the gadgets that go with Ipods, new high dollar digital cameras for all and lots of new high dollar clothes for everyone. Right now they think they are on top of the world and everything will be just fine. Little do they realize what lies ahead but they will have fond memories of Christmas past.

We have a couple of real oldsters working where I do. They are both somewhere in their early 80's and they can remember what happened during the '29 crash and after. They are now talking about it from time to time. Eggs a nickel a dozen, bread 12 cents a loaf. Shoes a dollar a pair. Gasoline at 15 to 20 cents a gallon. You could buy a new car for under $1,000, but nobody had any money to buy much of anything because there were no jobs.

After the depression came the dust bowl days and the recession lasted until WWII put everybody back to work. Today, we have no idea what will pull us out of this one. Obama sure won't do it.

The average man on the street is always the last to see much of anything. This depression didn't just start. The signs of the coming depression have been present for several years now even though it didn't get into full motion until early last year. Those who really knew what was happening could start to feel it's pinch about June or July last year and it has been getting continually worse day by day.

Businesses are on the front lines, among the common man on the street but they are not always the first to feel the effects of either economic booms nor busts. They just feel it quicker than their employees do. If you really want to know what is going on and when things might turn around keep a careful eye on the money trail. It goes in cycles. If the economy is going strong the money will always be buying into the stock markets and the DOW will be in a bull market. When the economy starts looking shaky and likely to turn from a bull into a bear the money will be looking for safe havens like bonds and government securities such as the T-bills and CD's. They will also be trading in currencies, betting on which currency is likely to go down the tubes. They will be short selling the weakest currencies, betting on the strong ones like the American dollar and the Japanese Yen. They will also be short selling energy stocks as the price of oil tumbles because as more and more businesses go belly up the demand for crude will decrease rapidly. These things don't happen in a month or two. The changes in financial markets and the strategies behind them take years to change directions. Often 10 years or more. The smart money move now is into safe havens for money, not speculation.

Be all that as it may, I do hope you and your family are having a very Merry Christmas.

 

While I'm no expert, I believe it is premature, and technically incorrect, to claim that the nation as a whole is currently in a depression. Nobody knows where we are going from here (do we ever really?) and of course it is sensible to prepare for tough times, but let's not overstate the facts, either.

I do agree that Obama won't be able to do much to help as his bent is to "do something" which is often the worst thing a government can do, especially in hard times. He's already confirmed that he will allow the tax cuts on the "rich" to expire. I think he's hoping that the economy will be on the upturn at the time so he doesn't have to take much heat for that one.

bushka

 

A depression is defined as a 10% drop in GDP from (I am guessing here) any prior recent peak. Since we had a peak in Q2 08 from the stimulus checks I believe there's a chance we could qualify middle of 2009. ( a recession is merely 2 consecutive down quarters).

 

We haven't had (or will just have) two consecutive quarters of negative GDP growth.

They are re-defining recession so that they can say we've been in one for a year or more. Not true. By the definition we've always used, we are just now entering a recession.

But if you say anything long enough and loud enough, everyone will start to believe you.