My situation in a nutshell:
(1) I had a business that did really well for three years, and terribly for three subsequent years.
(2) During the three terrible years, I took on debt to try and keep it afloat and keep my bills paid. I used personal funds to also keep it floating.
(3) I finally ran out of money four months ago. Even my tiny retirement portfolio is gone. (Which I will deal with the IRS on that one when the time comes) I was a renter who never owned property (The economics and inflexibility of home ownership always creeped me out), I have no personal loans other than a car which is current, always paid on time, and will be paid off in a year. I also have no personal credit card debt. I have close family to help keep a roof on my head, but my financial life and independence is officially over for now. I'm basically starting from zero. As I just reduced my business operations and closed my office, I am now looking for a job (which is where a Chap 7 type of situation spooks me). I realistically wouldn't expect a new job in my field to pay me more than 70-80k, which where I live would make paying back these loans on a salary quite difficult.
As of right now, I'm holding several lines of credit, including two credit cards, all for the business, none of them personal. But I am the guarantor. The credit card debt is about 22% of that. Most of the accounts are in penalty (17% to 24%) with exception to one business loan of around 25k which has a low 7% rate. I've amassed about 4k in interest and fees this year alone as a result.
My personal credit score so far has not been affected by these business lapses, based on my latest report. But I am def. being hounded by the bank, and I am over 120 days on at least one account. What I'd need to pay to make everything current is well beyond my means.
The way I see it, I have two decisions to make:
(1) Try to settle. The good news is, I have somebody I trust who may be willing to extend me a very low interest 4% loan. To the extent I might be able to offer perhaps 50 cents on the dollar for the high interest accounts and pay right away. Not really sure if the bank would agree though.
(2) Declare Chapter 7. Make it official. Start from zero with actually zero, instead of -70k.
Chap 7 makes the most sense to me because it will still be very difficult for me to rebuilt my finances without it. But there are huge risks.
Settlement would eliminate the high interest nonsense and let me still service the remaining sane account (though I'd try and renegotiate the monthly payment on that anyway to get it down). But I'd owe not just the bank, but this trustworthy lender offering to help me. Remember too that I am anticipating IRS debt this year for raiding my IRA.
It's important to note i'm also not a young person in his/her 20's. Just turned 40 and now broke, so I don't have infinite time to rebuild my financial picture. In some respects, my life goals right now is (1) stop the emergency and (2) do what I can to stabilize my situation and save money immediately for when I am old.
Not sure what's best or even how to proceed.
Submitted June 12, 2018 at 12:10PM by anonybiz https://ift.tt/2sQn0H0
