I was a business owner and the business went under 5 years ago. I haven't made a single payment to any creditors since then and I've had no income since then. I also own nothing, not a car or house or anything. I fear if I start a new business I will just be sued for my outstanding debt and never be able to grow the business and just be stuck for the next 5 years. Do I have any options at all that don't include filing for bankruptcy? Thanks for any advice.
2006-12-27 23:59:10 · 12 answers · asked by Y Knot 2 in Business & Finance ➔ Credit
Only one decent answer in this whole mess! Stoppccdebt is correct on this one, this is the first place you need to look at.
Every state has a statute of limitations, where after a certain time the creditor loses the right to sue you for debts. Most states run 4-6 years. It will depend on just what types of debts you are talking about. So some investigation is needed on your part. See the link below for a discussion on the SOL laws.
Any debts that were not expired by the SOL can be paid off. You need to be careful how you proceed on this however, because you are trying to improve your credit score.
Note that as delinquent debts age, the first 2-3 years are the worst (credit score wise). After 5 years they do not have that great of an impact. But when you begin paying on those old debts, the status changes to more recent on your credit history, and it can hurt your score.
So try this. Ignore the debts that are past SOL. Negotiate with the other creditors and pay off those debts, but ONLY if they agree to remove the negative info from your credit history.
Bankruptcy is an option, but the key is how you plan to start your new business. If you are hoping for new credit, you won't stand a chance with a recent bankruptcy on your records. With no income or collateral (home or car) how do you intend to back any new credit?
Also start your new business as a "limited liability corporation (LLC)". There are protections from creditors involved, plus some income tax advantages. You need to discuss these details with an attorney.
Good luck, hope this helps.
2006-12-28 04:59:08 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Here's a crazy thought. Why not pay the money you legitimately owe them? You borrowed it, take responsibility, get a job, sell some stuff and pay it. Most creditors will work with you on payment plans. Set up a debt snowball to pay off the bills. Check out Dave Ramsey's site for information on debt snowballs and how to handle creditors.
2006-12-28 12:20:27 · answer #2 · answered by Cash Only 1 · 0⤊ 0⤋
Why wouldn't you declare bankruptcy? No income, no assets, and a boatload of old debt? who do you think bankruptcy was designed for......I'd at least talk to a BK atty.....you'd be darn lucky if you got bankruptcy protection!!!! Your credit is already down the tubes and w/out the BK protection, your creditors will just wait until you generate cash and THEN sue you and file a lien against your business...duh
2006-12-28 09:31:44 · answer #3 · answered by Paula M 5 · 0⤊ 0⤋
What i would do is file bankruptcy but since u said something not including bankruptcy why don't u file chapter13 they will break your all your bills into 1 bill it will probably be like $950.00 and once u r in chapter 13 no one can take anything from u unless u don't pay the chapter13 bill so what i suggest u to do is get a lawyer that does chapter 13 cases. u can put everything into chapter 13: car note,gas,lights,house,cable,taxes anything that u owe
2006-12-28 08:12:39 · answer #4 · answered by Tiffany B 2 · 0⤊ 0⤋
I recommend finding the statute of limitations in your state. You can search for it online. Most states limit your liability to within 4 or 5 years of the default date.
If you are beyond the statute of limitations, then you have no legal liability to pay. You of course would want to make sure you have competent legal advice to confirm these suggestions!
Also, if you start a new business, it is its own entity as long as you incorporate. It cannot be held liable for another business's debts unless it assumes them by agreement or sale.
2006-12-28 09:21:39 · answer #5 · answered by Anonymous · 1⤊ 0⤋
Damn...u need a credit counselor badly!! Seek out their help, since you will be pursued endlessly by the creditors.
Or...since you already waited 5 years, wait another 2 and a lot of the delinquencies may be removed (usually happens after 7 years).
Can you live with Mom till then? LMAO!!
2006-12-28 08:08:38 · answer #6 · answered by David 2 · 0⤊ 0⤋
You can get a loan from Prosper - http://www.ProsperFiveStar.com - then use the proceeds to catch up on payments. This will put you back on track and you can go from there. The Sturzstrom Funding Group on Prosper is probably the best group to join to get a business loan.
2006-12-28 08:07:38 · answer #7 · answered by Anonymous · 0⤊ 0⤋
I believe you would be fine just talking and negotiating with the creditors; they are likely to reduce your balance by 50% and work with you if they see you are putting forth an effort to resolve the matter. open your business and pay them off before it becomes worse.
2006-12-28 09:14:04 · answer #8 · answered by Von 1 · 0⤊ 0⤋
Short of bankruptcy, you still owe the money, and your creditors can collect when you have it.
2006-12-28 08:03:26 · answer #9 · answered by WC 7 · 0⤊ 0⤋
This website has a complete, step by step breakdown of how to handle your unfortunate situation. Good Luck.
2006-12-28 08:25:04 · answer #10 · answered by Anonymous · 0⤊ 0⤋