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Business Debt/Corp. Debt after a business closes

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Expert: - 12/30/2009


Question
My husband has a construction business. The economic state has hit us hard also. Currently we are left with many unpaid bills and the collection agencies have started calling. Prior to this we had thought of changing the business name to widen our scope of work. We were going to leave the company name and add a DBA with the new name. Given the current state of things we are now considering closing the business altogether. We are a corporation-although small. (My husband is the only officer of the company) What happens to the company debt if we close? Does the debt fall to my husband personally? And if it does what would keep us from closing and filing a personal bankruptcy reopening under a new name? Thank you!

Answer
Samantha:
Thank you for your question. Your situation is far too common these days and based on what you have disclosed, it is highly likely the debt for the business would have been personally guaranteed by your husband. That means business or not he is the responsible party. If you close you income opportunities are depleted and if creditors become persistent than you might be forced into further action. Starting over no matter what is a consideration between you and your professional advisors and would obviously involve having access to working capital so you can realize income with a new business. You would be better off looking at alternatives such as debt management or settlement to provide creditor relief, then exploring what options you have to recover whatever business you can with what you already have. If you need business planning advice, you should contact your local "SCORE" office, see www.score.org a non-profit agency that helps grow small businesses.

Hope this helps!

Respectfully,

Christine Janklow  

Business Debt

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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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