Personal credit tied to souly owened business

Depressed · 10-01-2007, 09:59 PM

Ok, so this may not be the right fourm but what the heck i'll ask anyway. If a person owns a very small company & files personal bankruptsy, do they have the ability to keep the business credit intact?

roybean · 10-02-2007, 12:01 AM

Quote:

Originally Posted by Depressed

Ok, so this may not be the right fourm but what the heck i'll ask anyway. If a person owns a very small company & files personal bankruptsy, do they have the ability to keep the business credit intact?

Did the person give a personal guarantee for credit extended to the business?

Hedwig · 10-02-2007, 12:26 AM

What form of business is it? Sole proprietorship, S corp, C corp, LLC?

Is the credit in the business name or in the individual's name but only used for the business?

And, as roybean said, did the owner give a personal guarantee when the loan or cc was taken out?

Depressed · 10-03-2007, 06:04 PM

The business is listed as 'Doing Business As' Some of the credit cards are in the business name with his name attached, and some in only his personal name, and I think one or two just in business name. Nowadays he has many of the charge accounts paperless so I can't see, but a few do still come via snail mail. The last time I looked he had 13 cc in both personal and business accounts. He has been using both personal and business cc to live off of, but trying to keep the business cc up to date. The personal ones have been the ones he puts off paying on.

Hedwig · 10-03-2007, 06:45 PM

From what I've seen, business accounts don't report on personal reports. However, if they're delinquent they may, if he gave a personal guarantee and his SSN.

I'd do just the opposite--pay the personal cards that affect the credit report and not the ones that don't report.

Depressed · 10-03-2007, 07:01 PM

I would have thought so too Hedwig, but his business, his money, and his choice. But then again, I would have been out getting a job until things and money were more stable, I also would have been out doing sales calls and promoting the heck out of the product every chance I got. Our phone volume is off because creditors and such call all day 7 days a week. Thats not something I would wish on anyone.

Hedwig · 10-03-2007, 07:29 PM

Running your own business takes a lot of time and a lot of money. I heard a statistic last week that said most start-up businesses cost twice as much as you planned and take twice as long as you planned.

So you should always have a back-up plan. Either a lot more money in the bank than you thought you'd need, or a part-time job to bring in some money. Promoting what you want to sell sounds like a no-brainer, too. People aren't going to come flocking to you until they know where you are and what you can do for them. He needs a big reality check.

Depressed · 10-03-2007, 08:28 PM

While he has a web site, it would seem that most business is done on E-Bay. He feels selling stock to stores is too much of a hassle. Still I have always felt that there was so much that could be done cheeply to promote his product. But as he has a background in sales & I do not, he felt he knows what's best. All I can see is a huge mess that is doomed to fail if he does not wake up.

Hedwig · 10-03-2007, 08:36 PM

Well, hopefully you won't be there when it all falls apart.

Depressed · 10-03-2007, 09:09 PM

Quote:

Originally Posted by Hedwig

Well, hopefully you won't be there when it all falls apart.

LOL! That is so not on my 'to do list'.

Enigma · 10-09-2007, 01:47 PM

In general, if a business owner is a sole prop. and files BK, the bankruptcy court may force the sale of the non-exempt business assets to pay creditors.

drivel · 10-09-2007, 10:44 PM

a dba offers you absolutely no protection from creditors business wise or personally. Your law suit caption will say blank doing business as blank defendants which means any assets in the 'business name" are fair game for personal obligations as well.

Depressed · 11-29-2007, 04:44 AM

Drivel,
Thats what I was to find out by doing some research. What I also found out some time ago when he was trying to hide assets from 1st ex is that he will attempt to place his assets in his son's name. From what I can see with the decline in sales is, that in the end this move could hurt his son. As a BK of the business placed in his sons name will then be a BK for his son. For a man who thinks he is so smart and such a good salesman, his actions are VERY dumb.

As much as this man has hurt me, I can't help but feel sorry for him because I can see the huge crash and burn that is to come soon.

Hedwig · 11-29-2007, 09:49 AM

As I said before, I sure hope you're out of there before it happens!