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Question
I have been in business for 1 year with my business partner. the business is not thriving, and my business partner has just said she will take on all debt if i leave. Seems like a fair deal to me to get out of all the debt. Our accountant has said she can write up an agreement stating my partner will take on all debt, but am i really free of all the debt? I was willing to close business, but partner wants to continue. Any help?
Dear Kate:
Thank you for your inquiry. I regret that your business is not fairing well, leaving you with debt issues to resolve. Your partner seems well intentioned, however you both really need to consider some of the following to reach an informed decision.
First of all, who secured the debt via providing of personal or corporate information including SS# or Tax ID#?
If you personally guaranteed the debt by providing your signature and social security number, than no matter who makes the payment the debt will be your liability. It may also affect your credit score if there are any delinquencies involved.
Second, if your partner does assume "responsibility" in paying these debts, but falls short or can not pay because the business does not flourish under her watch, than again creditors will seek you out as the responsible party to pay them back.
Lastly, if this is really business debt owed by a business entity such as a corporation, LLC, etc. taken out only in the business name and tax ID, you might consider your partners offer, but I would strongly suggest that you seek legal counsel(not just the word of your accountant)for advise and to provide you with the appropriate agreement to secure your understanding and obligations to this matter. Bottom line, beware of relinquishing responsibility in debt matters, there are rarely any "free lunches."
I hope this answer was helpful and encourage you to rate it so others may benefit from your experience.
Respectfully,
Christine Janklow
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Answers by Expert:
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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