U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics > Personal Finance
 [Register]
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.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
Old 11-19-2018, 08:37 PM
 
5 posts, read 1,591 times
Reputation: 10

Advertisements

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.

Thank you.
Reply With Quote Quick reply to this message

 
Old 11-19-2018, 08:45 PM
 
Location: The Berk in Denver, CO USA
13,973 posts, read 20,244,681 times
Reputation: 22612
Consult with a BK lawyer.
Reply With Quote Quick reply to this message
 
Old 11-20-2018, 04:55 PM
 
Location: Ohio
19,772 posts, read 14,174,683 times
Reputation: 15955
Quote:
Originally Posted by warreng213 View Post
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.

Thank you.
I can see why your business is failing, since the information you provided is largely irrelevant.

What matters is whose name is on the credit cards, not the addresses.

Is it your personal name, or is it the name of your company?

If the credit cards are in the name of your company, did you advise the credit card issuers that your business changed from a limited liability company to sole proprietorship?

Because if you didn't, and you continued to use those cards, you have committed fraud.

There are two types of Chapter 7 Bankruptcy (Liquidation): voluntary and involuntary.

In a voluntary Chapter 7 Bankruptcy, you petition the court. An automatic stay is granted for any proceedings against you. When the Order of Relief is granted, non-bankruptcy proceedings may continue. That means if you were in court for child support or alimony at the time you petitioned for bankruptcy, those proceedings must cease, but when the Order of Relief is granted, they may continue right where they left off, because child support and alimony are exempt from bankruptcy, however all other actions to collect debts listed on the petition must still cease.

In an involuntary Chapter 7 Bankruptcy, your creditors petition the court. There are many reasons why they would want to, and legally can, do that and they can do that for either an individual or a business.

Had you properly notified your credit card issuers of the change in business organization status, they could have taken no action, or reduced your credit limits, or suspended your accounts, or closed your accounts, but you didn't give them that option.

Debt acquired through fraud cannot be discharged in a bankruptcy of any kind.

Running up your credit cards will only make things worse. Note that cash advances from credit cards may not be discharged. Federal law exempts $1,500 in cash advances from discharge, and if you use cash advances to pay off certain other debts, those amounts cannot be discharged, either, so if you took cash advances from one credit card to make payments on other credit cards, those amounts cannot be discharged. If you took cash advances to pay off student loans, those cannot be discharged.

The changes in BAPCPA in 2005 were designed to prevent people from running up their credit card debt and then filing bankruptcy. You will be forced to delay filing for a certain period of time from the date of the last use of the card.

When your credit card balance reaches a certain percentage of your credit limit, it automatically triggers your account to be flagged.

There are many reasons why banks do that. The most obvious being identity theft. Banks want to discover identity theft and stop it as quickly as possible to reduce or limit their financial losses.

If you use a credit monitoring service, you'll know if your account has been flagged, because you'll have a hard inquiry from the bank who's looking at your credit report to see if other card accounts are maxed out or approaching credit limits, and reviewing your overall credit standing to reassess your credit risk, and that will result in further investigation or actions by the bank, which may include lowering your credit limit, or suspending or closing your account.

If necessary, the credit card issuer(s) may file an involuntary Chapter 7 Bankruptcy, so the trustee appointed by the bankruptcy judge can seize your business and sell off the inventory and other assets to pay the debts.

You should probably find a job and shut down your business, so that you have a real income.
Reply With Quote Quick reply to this message
 
Old 11-21-2018, 06:34 AM
 
Location: Scottsdale, AZ
7,494 posts, read 4,599,637 times
Reputation: 27420
Quote:
Originally Posted by warreng213 View Post
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?

No, they'll come after your house if you have equity in it. That's what a bankruptcy lawyer told me.
Reply With Quote Quick reply to this message
 
Old 11-21-2018, 06:36 AM
 
3,348 posts, read 1,261,262 times
Reputation: 6541
Serious Answer:
find a lawyer.
Reply With Quote Quick reply to this message
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.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics > Personal Finance
Follow City-Data.com founder on our Forum or

All times are GMT -6. The time now is 08:57 PM.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top