What do I do?

[Cathy]

I think I have to file bankruptcy. I find I am $150,000. in debt with credit cards in my business. I sell pet supplies and business has just not picked up and I am way over my head. My partner still thinks we can make it, if we can get investment interest in our business but I think we are just too high risk now to be of interest by anyone. I think we are too far gone.

I have no assets, a 15 year old van, I rent, I am in mortal fear of being homeless. I am just now researching bankruptcy. I don't know that debt consolidation will help but would like to try. I don't know where to turn.

I read just now that in order to decare bankruptcy that I cannot have used my credit cards for a period of time. But I have used them just yesterday. I am about out of credit anyway. I have not tried to defraud anyone, I am just in such a mess.

I want this to be over with and I am just now beginning to see that I am in for a real mess. I don't know where to go for help, information.

I am so afraid of the next day to come. I cannot sleep, cannot eat.

[Dawn1970]

Dear Cathy,
I'm not one of the knowledgeable ones on here, so I can't offer sound legal advice. But I am somebody who's waiting on her Chapter 7 discharge so maybe I can offer some personal advice!

From what limited information you've shared, I say "Go for it." It's a hard thing to do, but if you realistically don't see your situation getting any better at any point in the near future, it's probably the best choice. When I decided to file, I cried all the way to the lawyer's office. I swore I'd dehydrate if I didn't cease and desist with the tear drops soon. LOL :o Like you described, I could not eat or sleep either. I gave up a house in mine. You say you have no assets and owe $150,000. You sound like a prime candidate for Chapter 7, in my personal opinion. Do you realistically believe you'll someday be able to repay that $150,000 while keeping your credit intact? If the answer is no, then I'd bite the bullet and go ahead and file. Stop paying on the credit cards for about 90 days, (I think that's what the moderators recommended?) and of course, don't use them in those 90 days either. In fact, stop paying on anything that can't get cut off , repossessed or taken away. Ignore the creditors' phone calls. Then file. If there's anything I can do or say to make this emotionally easier on you, please feel free to contact me. At least I'm somebody who's been there!

Your partner in the pet supply business may be worried that your bankruptcy will affect him/her somehow, so that's probably why he/she discourages you from filing. Good luck to you, regardless of what you decide to do!

[Nozhayr]

Hi Cathy

I read just now that in order to decare bankruptcy that I cannot have used my credit cards for a period of time. IMHO this is not true. You can't have used you CC's to make MAJOR pruchases within (I think) 6 mos. If you used them to buy food and gas, that's something you did to survive. Wether or not you used you CC's recently has no bearing on IF you can file. You can still file.

Bill

[Cathy]

Hi there
Sorry I have not been back to answer but I have been working my ass off to get through this mess. My partner does not want us to file bankrupcy and neither do I as he feels we can get through this mess.

The big problems are the interest rates on the CC's. We can barely keep up with minimum payments. We have stopped using all but one card that we load up with cash and then use for orders we cannot get sent COD. We do have a debit card coming with our bank account which also can be used to get merchandise needed for our store. We cannot make money without having stock. We have spoke to a few creditors (not CC's) who are working with us to let us pay them off a bit more than the order costs to pay off our debt, which will help a lot.

Should we stop using the one credit card we have left now? A debit card is not the same thing as a credit card is it? (No Visa/MC logo)
My partner is as scared as I am about all of this and by the way he is also my boyfriend so he has as much to lose as I do, well not as much as the debt is still all in my name and the companies name. Yes, he is a 49% partner but he takes no salary. We live together and he is not skimming anything from the business. We earn nothing more than it takes to buy food, rent and utilities.

We do have a plan though that may work to get us out of this mess.
You see, we are rent poor. We have twice the space leased that we need and the space did not pay for itself like we expected. We want to now dump the storefront with the fancy windows and move the whole thing into a large IN building space we are renting for our warehouse and shipping that is big enough to house the store, the back stock and the shipping department, a pet play area for seminars, toy making classes and our offices are there too.

Unfortunately, I think our landlords have lost faith in us (we are behind on the rent about $8000) and are talking of showing the space to new tenents. if that happens we will lose the big space and have to go elsewhere to ship and that would be a royal pain trying to keep inventory under control for orders, stock etc. We are hard set to try and get this to work.

But at $150,000 in CC debt can we really get out of it? Or are we just spinning our wheels? We did $333,000 in 2004, $165,000 in 2003 and $90,000 in 2002. So we are growing. If we grow to $600,000 in 2005 can we still get through our debt?

Can I keep the business doing chapter 7 or credit consolidation?
Do we just start selling off our inventory and try to survive long enough to get jobs and give it up? I have done this for 12 years.

I LOVE doing what I do and want to make this work. Am I nuts?

[Cathy]

More to add, I am so afraid.

I am sure this is just muddles up things even more. But I was a sole proprietor until this past March when I incorporated. I have about half of my credit card debt on my personal cards and half on my business credit cards. Totaling about $150,000. I am really screwed here.
I do not want to declare bankruptcy. But do I have to in order to get out of this mess?
Some of this mess was brought on by hiring "professionals" to help with our paperwirk, accounting and just messed them up more and cost us about $14,000 for the privilage. We are on our 3rd accounting firm and I see no light ahead there either.
I am sure this was a mistake now, but here is the history in a nutshell. I had a home based biz for 10 years, just a small pet supply thing. Met my boyfriend, we worked together to build it, got a storefront, the place grew, it was all in my name only until we incorporated in Marhc 2004 and I gave him 49% of the business. Now he is going to go down with me isn't he? He has little if no credit (lost from his ugly divource a few years back) but now he is connected my business he is going to lose it all too if we file bankrupcy, right? I just don't know what to do.
The business seems to be geting better, we have income, we havedoubled sales for the last three years but this past year we took on more rental space that hurt us bad. We are trying to get the landlords to let us out of one space and build up the other to house the whole business but they are now talking of showing it to other tenents. Can we keep them from doiing this if we have a lease? I am just a wreck here.
I have no assets, a 13 year of mini van, some family furnature and a 30 year old TV. I rent, I have not worked for anyone else in 10 years. I would not even know what sort of job I could get. Before that I was a waitress for 17 years. I am so worried about everything.
I want to keep my business, i want to consolidate the space to a manageable size I can pay for. We have special events planned to bring in more business but with $150,000 IN CREDIT CARD DEBT DO I HAVE SNOW BALLS CHANCE IN HELL? oops caps lock sorry.

[ks1488]

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Best of luck to you!