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Business Debt/Personal Guarantee on Business LOC

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Expert: - 3/10/2010


Question
Like a lot of us out here we are in the financial battle for our business life. We have had a 60% decline in gross receipts since the meltdown and the big bailouts. We have spent and used every bit of money and credit to stay alive. We have managed to work out BLP's with a lot of our creditors, however we have a BLOC with Chase(that is personally guaranteed) and they refuse to even talk about it. Instead they get nastier using the "Right to Offset" and threatening 'acceleration of the note'. We have been sending them payments, but well below their minimum. What are the consequences of this scenario? We are contemplating bankruptcy but don't want to since we have made agreements with everybody BUT Chase. We are in Florida.
Thank you.

Answer
Mark:
Thank you for your question. I understand your dilemma and assure that your situation is quite common. Your dealings with this creditor are a matter of leverage and because your remain current, apparently bank with them and have signed a personal guarantee they are using all points to gain your compliance. Obviously the terms your entered when the loan originated do not apply on your side, only theirs. If you want to avoid the immediate threat of offset, take your business and personal checking, savings, etc. to another bank whom you don't owe money to. As for the personal guarantee, you are self employed, so if your business fails there won't be any money to pay the debt personally. Lastly, most creditors including this one should offer hardship programs to help you get payments/interest reduced. You will still need to repay 100% but have a bit more ease in doing so, they typically offer these programs (or are more willing to discuss) after a payment or two have been "missed". Lastly, if you have the means, you could attempt to negotiate a settlement with them. Hope this helps.

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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