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Business Debt/Buying a business with debt

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Expert: - 12/12/2008


Question
My husband & I are looking at buying a store that has a high debt. With research we have found out that most of the debt was made by the owner for personal needs. He is willing to have in the contract that he would be responsible for all past debts. Will that be enough to protect the business, so that I'm not responsible for any of his past credit card debts, made in the name of the business.

Answer
April:
Thank you for your inquiry. I appreciate that you have the ability to invest in this difficult market. That said, I can only comment on my experiences with small business owners who have done the same, purchased a business claiming no liability to past due or old corporate debts than being left on the hook when the old owner disappears. I would hate for that to become your future. The only way to insure it won't happen, is to engage a competent lawyer to draw up the proper documents and preferably start a fresh corporation not tied to any guarantees or debts of the business, you might look to file a DBA of the existing business name to help the transition look seamless. Get whatever you need in writing to minimize your exposure in the future. I wish you the best in your endeavor.

Respectfully,

Christine Janklow

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Christine Janklow

Expertise

As President of SettleSource,Inc. a business debt settlement firm, I invite you to inquire about all aspects of business debt solutions to best determine which may be most appropriate. If you have questions such as: What is debt settlement and how process provide debt relief to my business? What options are available to deal with my business debts? Is it possible for a business owner to negotiate their own settlements? Why is debt settlement preferable to filing a bankruptcy or debt consolidation? Why are creditors willing to provide settlements to a business? How will settling debts affect credit scores? or How to rebuild a business after debt is eliminated. Please ask it now! For more information regarding how debt settlement can help your business, please visit www.SettleSource.com and place your inquiry. Mention All Experts to have a confidential no cost consultation with Christine. If this is your business situation time may play a very important factor in getting matters resolved proactively before they have negative affects on the business.

Experience

My expertise is specific to providing business solutions that will have profound positive impacts on the financial health of businesses. I have 25 years experience as an entrepreneur and have developed national sales programs; strategic alliances; product development; marketing programs; business and turnaround plans and debt settlement programs all providing methods to improve the financial outlook for large and small businesses. In the area of commercial debt settlement I have over 10 years experience working with large and medium corporations and closely held businesses to enable successful debt reduction and turnaround. I am a professional debt arbitrator and have negotiated with major banking institutions as well as vendors, suppliers and other trade creditors.

Organizations
Provisors;Turnaround Management Association; Los Angeles area

Publications
Accounting Today; Web CPA; National Restauarant Association;Los Angeles Daily News; Today Magazine Monthly series of business articles entitled "Brand News."

Education/Credentials
Bachelor of Business Administration; Associate of Arts Merchandising

Past/Present Clients
American Airlines, American Express, Safeway Inc., New York Life, consumer products manufacturers; retailers, food service industry and other small businesses and service providers.

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