Lot to learn, input appreciated

[MARKETSACRIFICE]

Well i have been lurking for a while now, and it seems like i am winding down towards the inevitable.

My situation: roughly $90k in personal revolving debt
additional $150k in unsecured biz debt (50% partner)
three pieces of RE with neg equity
one piece commercial RE with $100k equity that i own 25% of.
Car payment of $800 (upside down $15k+)
CS payment of $1400 a month
Alimony $1000 a month for 36 more months
$1000 in rent

averaged $7500 a month GROSS salary this year about $5000 take home after taxes and insurance

Divorce settlement was done at height of business sucess. Market has greatly turned, income down about 45% from end of 2006.

Things are looking up but i dont think i can handle the 4 - 5 years of getting my feet back on the ground. Getting a clean start seems to be the best "business" decision available to me.

I have a couple of questions:

1. The vehicle, can/should i go buy a cheaper vehicle now and then drive the one i have now back to the lot prior to filing?

2. I have two sizeable investments in high risk mediums that i would like to keep. Thought there was no chance but attorney believes there is a good shot. One is a privately held company with no way to "value" investment nor sell, the other is a ton of shares of a pink sheeted company, i own more shares than have been traded in the past year. Meaning, i dont think the trustee could even sell them and if he did, would be extremely low net (under .10 cents a share). Is it really possible i could retain those?

3. some of the business debt would conitnued to be service through the company (i am cosigner with my biz partner), i would have to believe that odds are they will shut down credit access to company regardless, anyone have experience?

4. the four properties i own are actually serviced through my main company, the money never actually flows through me. however, they show up on my credit and i am responsible (personal guarantor). do i have to show this as "income" and then expense or does it matter? and what happens to the building we are $100k to the good in? does the trustee sell that? it would be at the most $20k net IF they were able to sell it in this market. If they dont sell it, do i stay on the deed but am not a personal guarantor any more? confusing.

5. credit score is presently 750+ with no missed payments. does it matter if i dont ding my credit prior to filing? i have pulled off paying everything by borrowing and robbing peter to pay paul. Last transfer was early august.

i am sure i have alot more, but these are what are on my mind today. Im scared, nervous, excited?, and a thousand other emotions. I never thought this would be me, never.

Funny how it all turns out.

Thank all of you who participate in this forum. You truly have been a service to me over the past several months.

[lrprn]

If you've been lurking awhile, then it won't surprise you when I say you need to find a very good bankruptcy lawyer for your complex case. Set up appointments with 3-4 experienced bk attorneys in your area who frequently handle bankruptcies with personal business debt and multiple properties involved. Your situation is far beyond a simple, straightforward personal bankruptcy and you need expert legal advice to help you sort out your options.

Glad you found us, and hope you'll hang around with us for awhile!

[Flamingo]

Lrprn is right and welcome! The more complex your situation is (as yours is), the more various opinions you will get on here and when you have business and personal mixed together, the best thing to do is get yourself good BK counsel with a proven track record as to handling both. It won't be pretty and it won't be fun as I am sure you are well aware.

As to your question #5...since you are robbing Peter to pay Paul your major creditors are already aware of that whether or not you know it and will either soon start raising your rates or lowering your credit limit and your scores will soon drop anyway if you have have balances and are only making minimum payments. Since you are going to file, you can make minimum payments if you want to but as soon as you file your scores are going to drop dramatically. However, there is one good thing to keeping payments on time prior to filing and that is if and when you apply for credit in the years to come after filing. Some creditors view your credit history prior to filing as a positive if you made payments up to the date of filing and show a good credit history prior to filing. We did the same but the robbing Peter to pay Paul got to the point where Paul and Peter both ran out of money and we were just dropping further into the spiral of the big black no return hole. That will eventually occur with you also if you continue on doing that. Unless someone knocks on your door and hands you a $100,000 check there is no way you are going to get out of that hole you dug yourself into without filing BK

Don't worry so much about your credit scores...what is most important is what has to be done now and the rest can be repaired later.

Best of luck to you!

[MARKETSACRIFICE]

Thank you both for the welcome.

Yes, i have counsel, and what appears to be competent counsel. Have met with him 3 times with my business partner (s) and He is presently negotiating down the debt on two of the investment properties to FMV for us with the lien holder.

Part of my decision formula is the credit will be hit with these short sales and a third condo is in litigation on a seperate matter but foreclosure preceedings have been filed (owner financed, not on bureau). BK would prevent that deficiency judgement from those individuals on the FC.

My personal meeting is with him next weds, but you can imagine my mind is racing and i am armed with enough to be dangerous but not always accurate.

The 100k check is the truth. I have been chasing that dream since i was 50k in the hole last year and lost about 20k in the stock market the past two months trying to double up catch up. Up until 6 months ago i was going the other way and i was on an accepted long road. Then two more pay cuts came and it became obvious the road was getting longer as well as the sleepless nights.

I still feel i can get out of this without BK but the prospect and chances are slim and its a five year plan. I have lost years off my life with the induced stress this year and its hard to swallow five more years of uncertainty. By doing this i open myself up to alot of options not to mention reaonsable cash flow that can be banked and invested versus servicing prior sins.

i am committed to not petitioning the court for chang in CS, it doesnt feel right and there is no way that doesnt adversely effect my daughter directly and indirectly. The spousal is non negotiable in this state as it is a written court decree that cannot be dismissed unless she conceded an ammendment which she wouldnt.

I am ok with that.

I like the community here.

I am open to any and all suggestions and look forward to hearing others experience, strength and hope as i have read in the past few months.

Thank you all

[Flamingo]

MarketSacrifice - please note there are many in your situation in today's economy. The worst thing about trying to not file bankruptcy is that if you truly need to file, you will just put yourself deeper and deeper in debt as you try not to file (robbing Peter to pay Paul is the first indication you have just started down, what I call, the Spiraling Black Hole of No Return. Once you start doing that, there is really no way out unless, as I stated, someone knocks on your door and hands you that $100,00 check. We all know that won't happen. You are still in a state of denial which is normal at a time like that - you still look for a way out and hope you won't have to file but you truly know deep down there is no other way. Note that during the time right before filing, you are trying to justify your actions for the position you are now in and after all this is over you will realize that stuff happens and life goes on. The situation is what it is and you will have to do what you gotta do.

Your matter is extremely complicated. Listen to your attorney and you should be fine.

[BROKENN]

Welcome MS
We have a complicated case also with biz/personal. My DH and I fought for 4 years, last 2 heavily and he is Grey now..... it is not worth it

At the end of the long road this will be, my biggest current concern and future relief, is that my DH will be OK.

I would like you to be OK too.

Keep coming to the forum and study your booty off!

[MARKETSACRIFICE]

Update......

Met with the attorney again last week, here is the summary.

Was introduced to a concept i had never heard of or read here, and that is "business debtor". I qualify as a business debtor because at least 51% of my debt is due to business and not as a consumer.

I will be filing individual chapter 7 as a business debtor. The BIG advantage is there is NO means test as a business debtor filing. This was a large concern for me. What a relief! This is not a chapter 7 on my c-corp or any of my llc's, but just an individual chapter 7.

In answer to my own questions below:

1. I will be buying a vehicle this week before my first 30 day hits the bureau(s) October 1st. I have made my last payment on my present vehicle as i am upside down at least $15,000. I will hand the keys over probably in november on my present vehicle that i am letting go, ultimately having 1 30 day late on this car payment prior to filing sometime in november. The vehicle i buy this week will be protected and paid for in the BK.

2. Short answer is yes, i COULD retain those. If the trustee cannot sell an asset then it is abandoned and reverts back to me.


3. If credit lines thorugh the company have balances, then yes more than likely they will be closed upon my BK. However, if they are zero balance, they dont have to be included nor notified and he feels there is an ample shot that they would be left open.

4. I had concern over some real property that i hold joint title to. Apparently, the trustee can not force the sale of the joint asset, only sell my stake or position within the LLC which includes my asset and liability. From what i understand this is a theory and rarely would someone be interested in actually "purchasing" my position. As such, looks like i would/will be able to keep my position and title within various properties.

5. i have been advised to make the minimum payments up until filing to increase the time from last credit use and to show good faith.

So in a nut shell, i will be filing by end of year. If i remove my emotions, it really makes economic sense. If i dont remove my emotions, i feel like a complete jerk for going and buying a vehicle this week knowing i am about to default on my present car. i am also suffering from some denial as flamingo so accurately pointed out thinking that there may be a better way to get out of this hole.

The end result of all this? I am wiping out $90k in consumer revolving debt, looking at possible settlements on up to $100k in business debt, removing my personal guarantees on all business debt and real estate holdings, ridding myself of a large loss on present vehicle, and getting myself "judgement" proof on two or three foreclosures that are looming in early to mid 2009. In the process i am one week away from being officially late on a payment in 35 years, and about to ruin "perfect" credit.

alot of you have been through this emotional roll-a-coster, i truely enjoy reading your posts and insights.

I hope this post may have helped some other small business people who i have seen post various similar scenarios.

Thank you all!

[Minnymouth]

Sounds like you have the "right attorney" and have made the "right decisions" to help get your financial life back on track.
The hardest part of it all is making the decisions...... after that its uphill all the way.....
You may be pleasantly surprised in the end that you actually come out "smelling like a rose" when its all over...

Keep us posted as things progress...
Want to vent? Just jump in and cut loose!! We're here to listen......

[BROKENN]

Hi, I am glad you updated us! And I am glad you are happy with the news.
You can search business debtor on the forum and see a few threads of this type. There are a few of us on here recently who have been mucking through the rules also. I filed in Aug and am also a C7 business debtor.

Keep us posted! We will all learn something new I am sure! Or just get through it with help!