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Business Debt/s-corp/personal foreclosure

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Expert: - 8/18/2009


Question
Thank you ahead of time for your help!

I own a house with another person and we would both like to sell, we are stuggling greatly to stay current.  As the selling price is currently $50k below what we need to break even, that may not be an option for years to come.  I'd like to use the money I'm paying towards mortgage to pay off credit cards and other loans.
I also have a small business that is an S-Corp.  In October we will have been open 3 years.  It's a steady business, but I definitely can't afford to pay myself anymore than I am.
So my question is, if I foreclose on my house, would the drop in my personal credit score affect my ability to get a loan for the business.  I know I don't have to worry about personal liability if the business gets sued, but wasn't sure about this.

Answer
Douglas:
Thank you for your question. Sorry for your situation. You are like millions of homeowners, that find themselves upsidedown financially. You did not mention what state you reside, but you should check with your local department of real estate to see what if any options might exist for you. I know you could potentially short sell, or offer a deed-in-lieu to the lender, but this should be done with the help of legal or real estate professionals that can guide you through the labyrinth of paperwork and detail involved from walking away from your home (assuming that you go that route). As for your business, loans if I were you, you should begin to build up a separate credit score for your business now, so that you don't have to personally guarantee loans in the future. If a foreclosure does occur it will no doubt hurt your score for a while. Best of luck.

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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