Real Property

[m4l]

Hi,

I had a question that I was hoping somebody would be able to answer:

My current business has a line-up credit of a little over 200k and have defaulted (past 9 months) due to no income. The business is practically no longer operating with no substantial assets. Our personal home is a lien to this line-up credit, but the home has negative equity. If there was a sale, would the line-up credit lender have a $0 recovery? If so, how likely would it be possible to settle the loan at a fraction of its principal amount?


Any help would be appreciated. Thanks! Its a very tough time out in there market.

[AngelinaCatHub]

I must admit, I don't understand all those terms but if you are personally encumbered, it looks like you are a candidate for a Chapter 7. Give up the house, it is not a home. A home is where family a peace is found. In C7 all unsecured debt is forgiven, and secured debt can be returned. This is all I can tell you now with what I know. 'Hub

[m4l]

Thanks for your reply. My question was basically:

Let's say I did file for Chapter 7. The house was sold. Now, the mortgage on the house isn't even fully paid (negative equity). Would the business line-up have a $0 recovery? If so, would I be able to negotiate with the line-up lender? Given that there is no value in the loan, I could argue that 5% is better than nothing. Please let me know if tactic is possible.

[AngelinaCatHub]

Thanks for your reply. My question was basically:

Let's say I did file for Chapter 7. The house was sold. Now, the mortgage on the house isn't even fully paid (negative equity). Would the business line-up have a $0 recovery? If so, would I be able to negotiate with the line-up lender? Given that there is no value in the loan, I could argue that 5% is better than nothing. Please let me know if tactic is possible.

Again, I have no idea of the term "business line up loan" but if you are personally responsible for it, the Chapter 7 will negate your obligation for an unsecured loan. On the C7 forum, read all the 'stickies' and you will become very well informed in little time about many things. Another resource is the C7 book put out my Nolo Press at nolo.com for about 17 bucks pdf download and is everything you need to know about 7 and all the forms too. Also, wait for others here who are more informed about business bk than I am. 'Hub

[lrprn]

A bankruptcy with a business involved - especially a business you want to keep after bankruptcy - is not a pro se (file without a lawyer) proposition. You need expert legal advice to make sure you protect everything you can.

Have you set up 3-4 free initial consultations with experienced bk lawyers who file consumer with businesses cases yet? I strongly encourage you to do that. You'll learn a great deal about what's going to be possible to do if/when you do file.