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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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I am thnking of filing for bankruptcy. My business rent is

Customer Question

I am thnking of filing for bankruptcy. My business rent is $2500, (I did not pay April's rent), and now May is coming due fast. There is utilities bills due (about $500), and I owe the PA lottery about 12,000. I have a personal line of credit of $100,000 written against my house, and another $6000 in credit card bill to live on since I cant pay my bills. I sinking deeper and deeper and not making any money in the business. I am trying to sell the business, which would be preferrable to bankruptcy, but it has been on the market for about 4 months. I dont know how much longer I can hold on..
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 5 years ago.

Hi JACustomer,

What is your Bankruptcy Law question, please? (What would you like to know?)

Customer: replied 5 years ago.

What is the best way to proceed? I have an LLC but the $100,000 credit line is attached to my house , not LLC. What type of bankrupcy can I apply for to protect me most?

Expert:  cfortunato replied 5 years ago.

1) What is the current market value of your home? (How much can it be sold for?)

2) What are the balances on any mortgage(s) and the line of credit that is secured by your home?

Customer: replied 5 years ago.

The current value is about $210,00.

 

I do not have a mortgage, but did take out this credit line of $100,000 for my business and to consolidate debt.

Expert:  cfortunato replied 5 years ago.

If you file a Bankruptcy, you can have your liability for the $100k loan discharged, and also for the credit card debt, but since the loan is secured by the house, you will not be able to have the lien removed. In other words, if you cannot pay that loan, filing a Bankrutpcy will not save the home.

 

I think this is what you wanted to know. If not, please let me know.
Thank you!

Expert:  cfortunato replied 5 years ago.
In other words, if you file a Bankruptcy, the lender could not pursue other means of collecting the debt - such as placing liens on other assets. The only remedy available to the lender would be to sell the house.
Expert:  cfortunato replied 5 years ago.
Hi again,
Please let me know if you have any further questions.
If not, please don't forget to hit the "ACCEPT" button.
Thank you!