I had a small Limousine Company in New York. 22 Cars. After the 9-11 thing I lost tons and tons of business. Everything was financed, leased and personally signed for. All the cars were voluntarlt repod and sold at auction. My current situation is that I have 2 judgements for $28,000 and outstanding charge offs for $216,582 encompassing 19 accounts. Nothing was secured except the vehicles. The $216,582 is now unsecured debt. Is there any way that I can just leave these accounts alone for a little while, or should I consider bkrptsy. I really don't want to negeg on my debt, but there is no way possible that I can raise the funds to satisfy all these debts. I don't want to start contact these creditors, cause they just went and charged everything off, about 3 months after the first default. Was this just a courtsey, or are they going to keep trying to collect on these debts. I have not even received a collection letter from any of the companies. Brkptsy is expensive, in my case it would cost about $6,000. Any assistance is greatly appreciated. Thank you, James
Don't I have to Bkrpt me personal because everything is reporting under my personal credit as well as the business credit?
Obiously BK sounds like a good option. However, you should hire a good BK lawyer to guide you. It will be worth the investment. You need to protect your future income and what you have left. There are some good points raised here. Was your limo company incorporated? If so, it is the company that went BK, not you. Also, there is no law that requires you to declare BK if you can not pay your bills. Declare only if you have to, to protect remaining assets or prevent a judgement. You are also confused about the "charge-off" issue. All that means is that the creditor can no longer consider your account an asset on their financial books. It does not mean that you are off the hook, and in fact it usually means that the creditor will start serious collection efforts to recover the money. If you are dead broke with nothing to take, then I would fight the creditors tooth and nail. They know they won't get a dime, but they want the pleasure of getting a judgement or watching you go to BK. You have no legal defense, but if you make their decision to purse you a financial one, then you have a chance. The trick is to get them to a point where they have exausted their standard recovery reserves and then they have to make a BUSINESS decision on how much more money to spend pursuing you. Then it is a no-brainer. However, some creditors have no brains or financial common sense. They pay lawyers to fly across the country to attend a chapter 7 bk hearing when they know they aren't going to get dime.
I wanted you to be able to keep the YOU out of the BK...but if you used personal credit, I guess it WON'T happen that way...
The company is incorporated, but I signed personal guarantees on everything. I have already noticed 2 judgements on my reports, one from a newspaper and the other from the landlord leasing me the garage and office space. I have a few investment accounts, but nothing near what I need to pay off the debt, and if bkrpt, they will take everything that I have.
CMG, before you do anything, please check out the many avenues of financial assistance for 9/11 survivors. I can email you a lot of info if you like, or I can post links to online info here. There are low interest loans for small businesses affected by 9/11, and a whole lot of other options you might consider. Let me know if you'd like to pursue that, and I'll give you whatever info I've got.
CMG... One other note. The ULTIMATE protected asset is a 401k. An IRA is really good too is most states. These assets are protected by ERSIA. What is means is that creditors can get judgements on you all day long, but they can't touch your retirement money. Even if you declare BK, they can't touch that money. Only if they can prove that you have excess funds that you will not need in retirement. Even then, you can fight them. It is damn hard for someone else to legally get the right to take some of your ERSIA assets. I'd max out your retirement contributions if you know you are sinking financially. At least you get to keep something for later in your life. BTW... I too have been seriously in debt with no way to pay. I fought all my creditors to a stalemate and let the SOL clock run out. But I have over $350k in retirement assets and refused to touch it. It drove my creditors mad. They could see it, but they couldn't touch it. My feeling was, why make two huge mistakes in my life? I'd rather be bankrupt when I am young and can work than when I am old an can not. Good luck. Good idea on the Sept 11 help fund idea.
