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Confused at a lot of things, screwed by family members

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    Confused at a lot of things, screwed by family members

    Hi guys ... I know there's a ton of stickies and a lot of information out there, but it's so hard to find a launching point with my situation in particular, so I wanted to get down to it and give you the details on my situation.

    A few years ago, my mom and dad were working at a Napa Auto Parts. They were good friends with the owner. He wanted to sell the place or, more accurately, he was just getting out of it. I'm not sure all of the details, but I agreed to put the store in my name and let my parents run it. I went to the California Board of Equalization, got my business license, and all was well.

    The store ran for about a year - a bit longer than a year, actually. Then we abruptly closed when the building owner locked us out. Either way, I asked my dad if I had debt because of it, he said "maybe 1500 or so." I don't know ANYTHING about how the store was run. I don't know anything about the documents or the customers.

    All I know is I started getting my bank account at Wells Fargo garnished. I had a legal order processing fee from Wells Fargo that took $100 bucks (which is just their fee to do paper work) and then the rest went to the state. I left the account alone at zero for awhile, called my dad, he said he'd call around, figure things out. See about getting the debt put in his name. Every time I call him he's "waiting for a call back."

    The other day, I got another one of those fees, so my account is negative $100. I called Wells Fargo, tried to get them to waive the fee, and then they told me that California says I owe $17,000 and some change. At any rate, I got my Wells Fargo account to zero (today) and sent an email to have it closed, and am using a prepaid Walmart Moneycard to store my funds.

    But that $17,000 is there. I talked to my dad again and he insists he's really looking into it now. He mentioned bankruptcy - and actually, he mentioned a business bankruptcy. He says this is different from normal, and I'm not too sure what he means by that.

    I make around $1000 a month as a sports writer. I'm about to get promoted and I'm in a position where I can start heavily saving money. I'm really not in a position to be trying to pay off $17,000 worth of debt (plus around $2000 owed to a single hospital bill, that a creditor is harassing me about) over the next however many years. I just can't. I'm trying to start my life.

    But bankruptcy seems scary - I don't know what it entails, I don't even know if I have enough information to do it. I don't even know who to call to find out my dollar amount. I won't have any money at all until April 15, at which point I'll have a few hundred I can spend to maybe begin a payment plan with a lawyer to help me through this.

    I'm sorry this has been very long - but can someone tell me what they think? What would you do? Like I said, I'm only 21 and extremely dumb when it comes to this kind of thing. I want to have good credit, I really want to work on it - is it possible once this is done?

    Thanks.

    EDIT: Forgot to add, as far as my monthly expenses, there's not a lot. I'm making anywhere from $1000 to $1400 a month with the hopes of going to a very cheap community college very soon. I just moved in with the girlfriend and our rent is actually covered for a year, so my expenses are things like groceries, gas and phone.

    #2
    Welcome to the forum!

    If I were you, I would go ahead and file bankruptcy, so that you can put the whole mess behind you. It sounds like you have plans for your life, that you'd like to get on with. Yes, it can be scary, but most people on this forum have been there, and done that, and lived to tell about it.

    Also, since you say you are not very knowledgeable in bankruptcy matters, I would save up some cash to hire an attorney to help you out.

    By "business bankruptcy", your dad was probably referring to a non-consumer chapter 7, as opposed to consumer. The difference between the two is that, with a non-consumer case, you don't have to take the Means Test. This means that, no matter how much disposable income you have, you won't have to do a chapter 13. The $2K hospital bill also falls into that category.

    You didn't mention any other debt. Do you have any?

    And, yes, it is entirely possible to rebuild your credit after bankruptcy. In some cases, bankruptcy alone will up your score.

    If you have any other questions, we're here.
    Last edited by lotsahats; 03-21-2012, 06:51 PM. Reason: spelling errors
    Filed Chapter 7: March 19, 2012
    Discharged! June 28, 2012
    Closed! August 8, 2012

    Comment


      #3
      Do you know how much it generally is to hire an attorney? The only other debt I have is something I just found out about a couple days ago when I checked my credit report - I had something for like $100 from Sprint over an unpaid bill when I switched carriers. That's something I can take care of whenever ... So right now it's just that state debt and the hospital bill.

      Which bankruptcy is best for my situation? What information do I need for either?

      Comment


        #4
        Biggest question is what is the $17k owned to CA for? Taxes? If so, depending on what type, those may not be dischargeable via filing a bankruptcy.

        Have you been to see a BK lawyer yet?
        ~~ Filed Over Median Income Chapter 7: 12/17/2010 ~~ 341 Held: 1/12/2011 ~~ Discharged: 03/16/2011 ~~
        Not an attorney - just an opinionated woman.

        Comment


          #5
          I'm assuming it's sales tax, but I'm not sure ... no, I haven't been to see a BK lawyer yet. I guess I need to get on that. The problem is .. I don't know anything about the situation at all, and my dad is being uncooperative. One question I have is whether or not CA can touch my prepaid walmart debit card? At the very least, I can slow down a bit and tackle this without having to worry about whether or not my account is gonna be zeroed again.

          Comment


            #6
            The other day, I got another one of those fees, so my account is negative $100. I called Wells Fargo, tried to get them to waive the fee, and then they told me that California says I owe $17,000 and some change.
            Hold on a minute. Are we talking payroll and/or sales taxes? Why else would the State say you owe $$? Payroll taxes are not dischargeable in a bk. If we are dealing with payroll or even sales tax you need to talk to a tax attorney. Assuming your State is similar to mine, you had to be a “responsible party” to be liable for the trust fund tax. You state you had nothing to do with the business. If that is correct you may be able to get out from the assessment.

            Des.

            Comment


              #7
              We have had several recent threads discussing whether prepaid cards are "safe" in situations like yours. Let me look for the thread link for you.

              PS: Des who is giving you advice above is well worth listening to.
              ~~ Filed Over Median Income Chapter 7: 12/17/2010 ~~ 341 Held: 1/12/2011 ~~ Discharged: 03/16/2011 ~~
              Not an attorney - just an opinionated woman.

              Comment


                #8
                Originally posted by ValleYum View Post
                Biggest question is what is the $17k owned to CA for? Taxes? If so, depending on what type, those may not be dischargeable via filing a bankruptcy.
                This is very true. I'd assumed it was all business-related expenses. I missed that you said it was owed to California. Thanks, ValleYum!
                Last edited by lotsahats; 03-21-2012, 07:32 PM.
                Filed Chapter 7: March 19, 2012
                Discharged! June 28, 2012
                Closed! August 8, 2012

                Comment


                  #9
                  Originally posted by ValleYum View Post
                  Des who is giving you advice above is well worth listening to.
                  Yes, indeed!
                  Filed Chapter 7: March 19, 2012
                  Discharged! June 28, 2012
                  Closed! August 8, 2012

                  Comment


                    #10
                    In regards to payroll/sales tax ... again, I'm not sure. I will find out tomorrow and come back here since you guys seem like a very helpful and understanding bunch. I'll see what I can find out. But in regards to payroll, we didn't have any employees .. just my dad and my mom.

                    I did have nothing to do with it. I don't know a single thing about the business. I know it was in my name and I know I signed my name on a ton of checks when it all started. Does doing that make me a responsible party?

                    If it's taxes, aren't tax lawyers ... more expensive? I'm not positive I'll even have access to any documents that could potentially help me. My dad says he has a lot of papers from the store, but at this time I can't even get to him, let alone them (I'm currently in OH)

                    Thanks so much for the interest and help so far ..

                    Comment


                      #11
                      Thanks for all the accolades but I am only making a suggestion. OP faces an uphill battle with the "responsible party" issue since the business was put in his/her name. That alone may debunk my theory.

                      Edt. . . even more of a problem since OP states he/she signed checks. Having access to the business bank account typically makes one a "responsible party".

                      Des.

                      Comment


                        #12
                        It's too bad that your Dad is being uncooperative especially since he was the one that put you in the postion you are in the first place. You said that you would have a hard time paying that back yet I don't understand why your parents aren't helping you. Do they not have the money to pay off this debt or are they just figuring that since it's in your name it is your problem. At the very least they should come up with the funds to pay a tax/bankruptcy attorney. If these taxes end up not being dischargeable you are going to be dealing with this for awhile. You don't sound angry with your parents but they really should be stepping up to the plate on this one and dealing with it.

                        Just my .02 which is worth less than that.
                        Filed 11/17/11 Chapter 13, 341 meeting 12/21/11. Plan confirmed 1/19/12 - DISCHARGED 12/16/15

                        Comment


                          #13
                          He's been making only around $600 a month since the store closed. He's set to have a job in May, but it won't be paying a lot. I've been paying for their food and gas for the last couple months and I'm not going to be able to any longer.

                          Really, I just can't imagine having this $17,000 looming over my head any longer. I don't want a payment plan. I want out ... I really hope I can.

                          Comment


                            #14
                            Originally posted by lotsahats View Post
                            This is very true. I'd assumed it was all business-related expenses. I missed that you said it was owed to California. Thanks, ValleYum!
                            No trubbles, Bubbles! It's nice to know we have each other's backs here!
                            ~~ Filed Over Median Income Chapter 7: 12/17/2010 ~~ 341 Held: 1/12/2011 ~~ Discharged: 03/16/2011 ~~
                            Not an attorney - just an opinionated woman.

                            Comment


                              #15
                              Unfortunately if you are the responsible party in this issue (I agree that signing those checks for the business is going to probably make you the responsible party) you will now have to act like it. Start interviewing attorneys, immediately. Obviously your parents are not dependable, responsible people so do not depend on their help in this matter, take the bull by the horns and move forward. Did you receive any paperwork with regards to this issue? Start to search for public records online to see what you can find out about the issue. You may have to get an attorney just to have the paperwork obtained through the courts from your parents, you will have to make a business decision to keep the emotion out of it at this point and do what you have to do.

                              My guess is that this is probably not the first time you have bailed your parents out of a mess or financially supported them as they do not seem bothered by putting you through something like this. Save yourself the heartache and stop looking for them to help you, you will get nowhere in a situation like this. It sounds like maybe BK was their plan for you all along (in that if it did not work out you could always file kind of thing). I feel for you. I think you need to start with an attorney, seriously. Good Luck with this!

                              Comment

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