What would happen if I were stop paying my business credit cards? (mortgage, loans)
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Hi all,
So my small business is still relatively new as it opened 11/2016.
Before I opened my small business, I opened a bunch of business credit cards from different banks totaling around $40k line of credit. Idk if this info will matter at all, but when I opened my business, I had initially set it up as an LLC and had given the credit card companies the address to my home and not my store address. The reason for this is, at that time, i was still shopping around for desirable locations so it was still undetermined. Since then, I have changed my business from LLC to a sole proprietor (as it should've been), and still have not given the credit card company my business address.
Anyways - this year has been really tough for my business and I am pretty much just using up all my credit cards. the credit card bills are extremely overwhelming and the credit card bills is the reason why I am having such a hard time trying to keep my business alive. my business produces just enough income to cover the mortgage, the store's rent, and all the other necessities. I just cannot afford to pay the credit card bills anymore. I've tried applying for loans, debt consolidation loans, and personal loans - all with no avail.
My question is this, if I just max out all my credit cards and decide not to pay them, will only my credit be affected? Or will they come after my business? My business is the only thing thats bringing me income.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
44,553 posts, read 81,067,970 times
Reputation: 57712
As a sole proprietor they can come after your personal bank accounts and home, and for the amounts, it's likely that they will go to court and get a judgement against you as sole proprietor, and against the business as sole proprietorship. When the court issues a judgement, it can take funds from your personal and business accounts, and place a lien on your home.
You would have had to put your name on the accounts in order to get credit cards for a newly formed business, so the credit companies will come after you personally. They can, if they want to, get judgements and go after your personal property. It for sure will ruin your credit score.
If the credit company writes off the debt, they notify the IRS and you have to pay taxes on that amount. I assure you, the IRS doesn't have much of a sense of humor.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
