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Good afternoon. No...there is no requirement to be current. In fact, the reason most people file Ch. 7 is because they are not current on either their mortgage or their other bills.
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I need more information to answer your question. Please answer all of the questions:
1) Is the hair salon a corporation?
2) Is the mortgage in the business name only, or also in your name personally?
3) What is the mortgage for?
4) Do you want to close the hair salon?
1) sole proprietor (2 months late on the rent payments to landlord)
2) have 2 loans on the business secured by my home. (in my name)
3) my home (which is 3 months behind and facing foreclosure.)
Since your business is a sole proprietorship, you cannot file a business Bankruptcy. If you want to eliminate the business's debts, you would have to file a personal Bankruptcy, and include the business debts in it. This is because debts of a sole proprietorship are considered to be the debts of the individual who owns the sole proprietorship.
In other words, you cannot be relieved of the responsibility to pay the debts of the business unless you file a personal Bankruptcy.
In any event, you absolutely do not have to be current on your mortgage to file a Chapter 7 Bankruptcy, as there is no such requirement anywhere in the Bankruptcy Code.
I think this is what you wanted to know. If not, please let me know.
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