Will I have issues discharging this debt?

[frodo123]

My business is failing, and almost 7 months ago now I had incurred a lot of debt, and pulled out about 60k in cash advances from credit cards to try to keep the business going. I've got a total of about $300k in unsecured debt to wipe out. I haven't had any cash advances in over 6 months, or any large business expenses.

I am looking to file a chapter 7 bankruptcy but I dont know if the judge will go back and make me repay the credit cards. Everything I have read says if the cash advances, etc are 6+ months old there is nothing to worry about.

Anyone have experience with this? Will it even be an issue? Should I wait longer to file?

Thanks

[AngelinaCat]

Hi Frodo:

From everything I have read here and in the Nolopress Ch 7 book, I would think that you should be okay. Now having said that, neither my husband or I have had a actual business. We were trying to do some Independent Contracting as computer hardware, software troubleshooting, on the side of our regular jobs. None of it was ever large enough to incorporate as a business, and we just dutifully filed our 1099 forms when we submitted our income tax returns. When 'Hub was building computers for customers as part of this side occupation, he did purchase computer components on the CC, but that phase of it was over years before we got into the position of needing to file BK.

Some of the other members with more business experience will post better anwers, but we will need to know a little more about your business.

Good luck to you and I hope this has helped some.

[BigJohn]

Does the business have any assets?
How is the business structured? i.e. incorporated?
How much of the credit cards are business related?
Can you show a paper trail were the money went?

[Flamingo]

The issue here is the business...and whether or not since the business is involved if they can look back further. It appears you utilized transferring personal funds from credit cards to keep the business afloat? Might be questions due to the amount.

[fltoo]

If the business was a corp and cards were issued to and guaranteed by the corp, a business bk would be the answer.

But, of course, with a small business, corp or sole prop, the cc sharks make you guarantee the loans personally.

So many of us used personal cc cards or cc in the business name, but personally guaranteed, to "help" along the business. I see no problem with the time frame, but the amount being discharged could warrant scrutiny whether business related or not.

Small businesses incorporate for the protection it offers, but when cc companies and even the landlord requires a personal guarantee, the protection is lost.

Again, we can only give you the details of our own experiences, we cannot tell you it is going to be "Okay." You need to ask your attorney.