Business Debt/Business Debt??

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Expert: - 11/3/2008


Question
Hi I have a question about business debt and personal debt we are going to be filing bankruptcy personally because our home has been foreclosed on and we have about 40,000 on credit cards and we have no assets but the business equipment is in our name personally and we are already behind on the payments so we are going to be letting them go as well and writing them off to personally in the bankruptcy but our business has about 2,700 on one credit card that is personally backed up but like I sad we are filing personally too so we wont be paying it unfortunately we hardly have enought money to keep the lights on and food on the table and we are living in our RV so we are trying to figure out how to even afford a lawyer at this point. and also we have one cell phone bill that we were getting riped off by nextel that we are not able to pay its about 500.00 and that is solely in the business name and that the only thing in the business name is the one credit card and the phone bill so my question is can we close the business with that debt or will it have to be paid off before we can do so or can it be written off personally because its an llc and my husband it the sole owner? any advice would be greatly appreciated
And also because we have no assets what can the creditors do to us in the next few months before we file for bankruptcy? oh and I do not work my husband is the only one who has a job

Answer
You can close a business while you have debt but you will have to continue to make the payments on that debt or you will be in default.  If you become in default the creditors can place the accounts with a collection agency or sue you for the money. You should call the creditors and tell them your situation to see what you can work out before you become past due.  
Creditors can continue to try and collect their money through whatever means possible until you file bankruptcy. Once you file bankruptcy, they will receive a notice from the court and then have to wait for the court to make a decision on those debts.  Depending on the courts decision, that will determine the creditors next step.

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Michelle Dunn

Expertise

As one of the Top 5 Women in Collections, one of the Top 50 Collection Professionals, and winner of the Business Excellence award, I can answer any questions about debt, debt collection, improving business credit, creating a credit policy, enforcing a credit policy and collecting on past due accounts. I can also answer questions in regards to starting a debt collection agency since I have been a bill collector for over 24 years, started and ran my own collection agency for 8 years, and maintain my 12 year old Credit & Collections Association for members of the credit & debt collection industry. I am also the author of the popular and award winning book "Starting a Collection Agency, how to make money collecting money" now on it's 3rd edition. This book has won a the Writers Digest self published award as well as the New York Book Festival Award. I am a repeat contributor to the Wall Street Journal, and have been featured on NPR, CNN, as well as many other national radio and television programs. I have also been featured in national publications such as the Wall Street Journal, Forbes, Smart Money, MSNBC and much more. I have 17 published books to my name and am an accomplished speaker and consultant. I currently write 9 columns for newspapers, magazines and online portals worldwide.

Experience

I have over 24 years experience in debt collection, I started and ran my own collection agency for 8 years and I am the founder & owner of my Credit & Collections Association that I founded in 1998. www.credit-and-collections.com

Organizations
My Credit & Collections Association, I was also a member of the American Collectors Association and Plymouth Chamber of Commerce for 11 years. I am a member of many writing groups as well as my local Women Inspiring Women chapter. I am a member of Know More Media as an expert for their blog on business credit.

Publications
Business NH Magazine, Smart Money Magazine, MSNBC, CNN, Forbes.com, The Wall Street Journal, Home Business Magazine, Entrepreneur Magazine and website, many books, newspapers and television programs as well.

Education/Credentials
I have written 17 books in my collecting money series and one for Entrepreneur Press called the Ultimate Credit and Collections Handbook. My newest book is being published by John Wiley & Sons in May titled, The Guide to Getting Paid, how to weed out bad paying customers, collect on past due balances and avoid bad debt. This book is also being sold to many colleges as a text book.

Awards and Honors
My book Starting a Collection Agency, how to make money collecting money won an award from Writers Digest and the 2007 New York Book Festival in the "How to" category. I have won 2 awards from Dun & Bradstreet and Governor Jean Shaheen. I was nominated as one of the Top 5 Women in Collections twice as well as having been selected as one of Collection Advisor's Top 50 Collection Professionals by my peers.

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