Forum Rules (Everyone Must Read!!!) (updated: 04/28/2015)

Welcome to the Bankruptcy Forum. Bankruptcy (BK) Forum is known as and will be referred to as BKF hereinafter. In order to ensure a long term success of our vibrant community, we have established certain rules and guidelines to which everyone must adhere to. Please take your time to carefully read our rules, before you start to participate in the community.

Things you agree to do: (BKF) users agree to use the search function before starting a new thread. This prevents duplicate discussions and allows for better organized topics.

All BKF users agree to read the sticky posts which may be available at the top of a forum page. These Sticky posts often contain valuable information. They may also outline more rules and guidelines specific for that particular forum, stickies are put in place by that forums moderator(s) or admin(s).

Things you agree not to do:

All BKF users agree not to call people names or write a post simply to make a personal attack, or get a negative reaction; this behavior is not allowed on our forum. The use of derogatory language aimed at anyone will be severely dealt with. There is no need to agree with each other, or to even like each other. However, by signing onto you agree to treat each member and guest with the respect they deserve. No threats or personal attacks will be allowed.

All BKF users agree not to discuss, engage, or encourage any behavior or activity which violates the law. Discussion of drugs, violence, murder, theft, vandalism, fraud or any other issue which could be used to help individuals break the law is strictly forbidden.

All BKF users agree not to "bump" old threads, unless there is a specific benefit to the community by doing so. But in most cases, please don't post in very old threads, instead start new threads.

All BKF users agree not to attempt/use another members account. It is against BKF rules to use any account other than your own. Impersonating another member will result in an immediate ban. It is also against the rules to open more than one account in your own name without permission from a moderator or administrator. If you have been banned for any reason, it is against the rules to open another account. If you were banned temporarily and you are caught using another account you will be banned permanently. Choosing a moniker which is similar in either sound or spelling as a moderator or administrator is strictly forbidden.

All BKF users agree not to private message any moderator, admin, or other member with questions related to their personal circumstances (Questions about the forum or issues with the forum are ok). This forum only works when members share their experience and insights with everyone.

Things you agree not to post:
All BKF users agree not to post any derogatory/racist/or sexist remarks. This includes attachments, links and all information contained within posts, signatures, and avatars, failure to comply with this rule will result in a permanent ban.

All BKF users agree not to post any copyrighted or trademarked information without the express written permission of the owner(s) / proper citation of source.

All BKF users agree not to post any real names, addresses, telephone numbers, email addresses, social security numbers, or any other personal details (their own or other people's).

All BKF users agree not to post links, pictures, attachments, videos, or the like of pornographic content, objectionable material or extreme violence, whether cartoon or real.

All BKF users agree not to use BKF for advertising purposes without a written contract between yourself/company/agent and the administration of BKF. Blatant advertising will result in a ban.

All BKF users agree not to spam the forums. Spam includes but is not limited to posting erroneous, non-relevant-useless, off-topic, or meaningless posts. Spam may also include posts which contain no text, or large areas of blank space between lines. Simply posting emoticons without text is considered spam. BKF is the largest bankruptcy message board and all the content is intended to help other users. Please help us improve the quality of our forum by making sure that your posts are well-worded, spell checked, grammatically correct and syntaxed.

Regarding actions of moderators and administrators:

The forum is no place to air out your opinion or be judgmental of our staff and its capabilities.

All BKF users agree not to abuse or mistreat moderators or administrators. It is against BKF rules to post any information regarding bans or any other action taken by a member of the moderating or administrative team. If you wish to discuss bans or warnings please do so via PM. To place a complaint against a moderator, send a PM to a super moderator. All Moderators are equal, any decision made by a moderator must be adhered to. If a moderator tells you something you do not like, do not go to another moderator looking for a different answer. If you are caught doing this you will be banned. The moderators work as a team and respect the decisions made by their peers and will help enforce them unless an administrator tells them differently.
If you have an issue with how the forum is run, then notify one of our administrator and we will look into the situation. We have in the past and still do appreciate any input that you offer this forum. But critical input and/or judgmental postings towards the staff will result in you getting banned.

Should you find a thread offensive or out of line, then notify a Mod in a PM so they can evaluate the situation and do the action deemed necessary.

All moderators do have active "other" lives outside of the forum and help moderate this forum in their spare time throughout the days and weeks.

If you have a problem with a member or Mod follow the proper channels of reporting it.

BKF reserves the right to delete any posts which contain anti-BKF comments or discussion. Any bashing of moderators or administrators, or any of their discussion or actions will also be deleted, and the responsible posting party(s) will be banned. Any public anti-BKF advertising, communication, or posts on another forum will result in permanent bans as well.

All warnings and bans are decided by individual moderators and administrators. Warnings are preferable to bans however, for serious offenses and repeat abusers bans will go into effect. The length of the bans can vary from several hours to permanent.

All messages posted or sent including through PM are the property of

All BKF users agree not to advertiser on the forum (Niether by posting, private messaging or using your signature). If you are a company/attorney/legal adviser wishing to advertise on the site or sell a product, you must contact the head administrator and inquire about our advertising packages.

All bankruptcy related opinions expressed on are those of their authors and not necessarily of BKF, its staff or representatives.

You agree not to copy any material/post/content from BKF without written permission from our head administrator .

By posting on this forum you agree to these terms and conditions, including any punishment deemed appropriate by moderators or administrators in the event of an offense.

Administrators/Moderators can change these rules at any time without prior notice.
See more
See less

Ugh...failed business, worthless property, mounting debt

  • Filter
  • Time
  • Show
Clear All
new posts

  • Question: Ugh...failed business, worthless property, mounting debt

    Hey all,

    Glad to have found this forum...and still somewhat in denial that I even needed to look for it.

    I've got a few questions for the group here, but let me give you the lay of the land.

    * In 2008, I was self employed, earning an income of $150k+ on a 1099, but it all came to a screeching halt in Oct 2008.

    * I started a company (C-Corp) with a colleague at the beginning of 2009. We self-funded the effort for 12 months, making capital contributions as necessary...but did not draw any income from it (or even generate any revenue).

    * During this time, I had 2 investment properties in AZ (both raw land). I purchased one with a friend of mine (he paid cash and I had a private note to him). The other I have a mortage on.

    * I recently quit claim the title of the property I owned with my friend back to him...essentially a private deed in lieu.

    * I have continued to pay the $1,700 mortgage on the other property.

    * I have also continued to pay rent, car payments, and credit cards on time, out of savings.

    Now I'm running out money.

    * I've taken some credit card 'balance transfer' offers in recent months to fund the no avail. It is not taking off...we're about to shut it down.

    * I've also taken a 'balance transfer' offer (~$30k) to put some cash in the bank account and help pay bills as I look for employment. ($1,700 mortgage, $2,000 rent, $400 car/ adds up fast!)

    All in, I'm about $60k in credit card debt, $270k in mortgage on the investment property that's now worth ~$40k-$50k (and at that, it's been on the market for 2 years without a bite). I don't own a primary residence. I've got about $50k in liquid assets, and $30k from the recent balance transfer. That's got to last until I can find an income and get back on my feet.

    I'm beginning to believe BK is inevitable. But I know there's probably a bunch of questionable flags as I've been earnestly trying to fund and build a business and I don't want any trouble as I drown here.

    So the questions are:
    1) I keep reading that you should stop charging things, etc as soon as you consult a bankruptcy attorney. But I'm not sure about BK vs just stopping payments on the property and trying to climb out of the rest of my debt when I (hopefully) get a job. So, when does a 'consultation' really constitute talking to a bankruptcy attorney? (I believe I'm still months away from filing if it were to come to that, but some real legal guidance at this point would be very helpful)

    2) Are there going to be issues with the property I quit claimed and gave up any rights to, in turn for forgiveness of the debt?

    3) I've had a few large ($5k-$10k) transfers into the C-corp to fund the business (web developers, marketing expenses, startup costs, etc). Any issues to watch out for there?

    4) I've certainly been doing a little of 'borrow from Peter to pay Paul' with 0% balance transfer offers, using that as cheap working capital and trying to make sure I didn't get into finance charge hell. How long does the dust need to settle on all this?

    5) If I do land a job that brings me back into a decent income, what's the criteria if I'm still feeling too overwhelmed in debt (especially $1,700/month on a property that will likely NEVER return to the value I owe on it). I think I'd prefer to discharge it in BK than foreclosure because I'd hate to have a $200k+ deficiency that the bank comes after me for in foreclosure.

    Any words of sage advice here are welcome.

    Thanks again for contributing to the forums here. It's great to find a helpful community!

  • #2
    There is nothing wrong with consulting with a lawyer to pre plan a bk. The problem arises in your conduct after the consultation. Continuing to use cc's for large purchases and cash advances or transfering assets out of your name for ex.
    With those large cash advances and bt's, you'll likely need to wait a year or more from the date of the transactions to safely file.

    The property you quitclaimed with no mortgage is gonna be a problem. The trustee could sue your friend for your half of the investment. You have an insider transfer issue that will mean waiting a year or more.

    For now, stop using those cards and start looking for a job. After all, you have to support yourself post bk.
    Bk may or may not be the answer. If you find a job quickly, you have the resources to repay the cc debt and may be able to reach a settlement with the lender on the investment property.
    Big thing now is, put down the shovel. The hole is deep enough. Focus on finding a job. The longer it takes, the more inevitable bk becomes but, since you have timing issues that can't be helped.
    Most bk lawyers give free or lowcost initial consultations. Speak wiith 2 or 3 and see what they say.


    • #3
      Hey SD,

      Welcome to the forum. You and I could have almost been the same person, a few years ago. I went through many very similar events, including business issues, property issues and large transfers. Each of those present challenges, but are not insurmountable.

      Yes, you should stop large transfers as soon as possible. And wait as long as you possibly can until filing. This can feel rough, with all the threatening phone calls and intimidation they try to shovel on top of you. But they really ARE powerless, at least in the beginning. It can take a long time (3 years for us) before debt collectors get really dangerous. Even then, they are stopped dead in their tracks by filing.

      Your ability to file Ch 7 vs 13 is determined almost entirely by the means test. There are online versions you can run to get an idea of your particular circumstances. A very good idea.

      Where any transfers are concerned, including real property, you want to put as much time as possible between the transfer and the filing. I know you have limited funds and a timeframe within which money will run out, but you really DO need as much time as you can round up. Did the partner investor hold an actual note? Perfected in the county, within legally acceptable timeframes? This could be a problem, if the answer is no. Trustees can and do look back years for these types of transfers. They can then undo the transfer and take the property, or your previous share rather. This can cause problems for your former partner. The reason is: It may look like you simply QC'd the property to avoid losing it. Even if that was not your intent, that is likely what the trustee will believe.

      There are other facets to consider, and you probably want to recover as soon as possible, get a new job or new source of income, but all those things can actually cause issues later. Particularly with income. You have to be below a certain threshold, determined by district, to file a CH 7. If the income is too high you may be forced into a CH 13 and have to pay back creditors. If you have assets you wish to protect, that might even be preferable, but for many it is not the best choice.
      11-20-09-- Filed Chapter 7
      12-23-09-- 341 Meeting-Early Christmas Gift?


      • #4
        Thanks for the comments here. A few short answers:

        The note on the property with my friend was essentially a private mortgage. I stopped making payments on it in Jan09. In Dec09, he essentially accepted a deed in lieu on the property and I signed it back to him and the note forgiven. (My $200k share of this property is currently valued at ~$30k...I owed him $150k. Not much for any creditor to go after considering I have essentially stiffed a friend for $120k)

        I don't have any assets to protect aside from the $50k in savings/liquid stocks. I don't own a primary residence, the car is leased, there's nothing.

        So far, I've probably been an idiot by keeping everything fact, my creit score is currently in the high 700's. Have never had a late payment in my life. I've bene trying to preserve my credit in the event I needed to start living off it until I could pick myself up and get back on track. Well, now I'm essentially doing that, racking up debt and slow-paying it with the little cash I do have.

        Trying to do the right thing has probably cost me a lot more stress, time and money than if I'd just started defaulting on things a year ago.

        I feel like I can handle the credit card debt (assuming I get some sort of employment in the near future), but need to get out from under the mortgage on worthless property. If I stop making payments and thrash my credit there, I'm concerned the bank will take forever to foreclose, and essentially keep my head under water with regards to trying to rebuild credit and recover. And then I have to worry about any deficiency they may come after me for.

        Anybody with experience there??


        • #5
          You're on the cusp of bk. Your credit score should be the least of your concerns.
          Why are you worried about how long it takes to foreclose? You don't need a formal foreclosure in order to include the debt in bk.
          You're worried about things beyond your control. Focus on what you can control. Since you don't have a routine Chapter 7 due to the cash advances and quit claim you need some legal advice about how long you need to wait before you file.
          Also, you need to find someway to generate income. Were it me, I'd stop paying all debt I wish to discharge and use your cash for living expenses while I looked for some sort of a job.


          • #6
            I can relate to your frustration and fear on a far smaller financial scale. My credit score was in the high 700s with no missed payments prior to my chosen foreclosure. I played the CC balance bouncing game for years. I was unemployed for a year, took a job at a significantly reduced salary, and lived ultra frugally to appease my creditors. My ongoing money pit house triggered new thinking. I was faced with the decision to head down the foreclosure path or file BK or endure both. I, obviously, selected BK.

            Like you, I had the ability to pay off my CC debt provided the future remained constant (employment, no major financial hits, etc). This was especially true if I decided to go through the foreclosure process. I could shift funds from my mortgage to my CCs. The biggest hurdle was that unknown possibility of a deficiency judgment. If I was faced with a DJ, I would undoubtedly have to file BK. Concerned with credit (I used to think FICO was my friend), I weighed the possibility of having a foreclosure followed by a BK.

            Ultimately, I selected the path of least resistance and ambiguity. I didn't want the extended SOL for a DJ hanging over my head in coming years. I recognized I needed to move financially forward. For me, BK was the best option.

            You have options. I really think you'll benefit by meeting with a few BK attorneys. Some may hard-sell the BK, others may not (the attorney I selected was well-versed on foreclosure and its effects). You'll also benefit by breaking up with your credit score. If you decide to default on one of your cards or your mortgage, the CC companies will likely make this break up easier (by reducing limits, increasing rates, and doing their clever "universal" thing!). Don't let them scare can be rebuilt.

            Bottom line, you need to move forward. I wish you the best in finding your path.
            *Filed: September 23, 2009 *341: November 4, 2009 *Discharged: January 4, 2010 *Closed: January 20, 2010

            Hakuna means NO WORRIES!


            Unconfigured Ad Widget