Hi, thanks for your question. You should hire a lawyer for specific legal advice. No attorney client relationship is created here.
You can try to settle with whomever you wish. You should request that the business debts prove that there is personal liability first. If you had incorporated or had an LLC, and didn't sign any personal guarantees, then you shouldn't be liable for those debts if the business is dissolved.
Settlements are taxable, you are taxed as if the savings was income to you.
Talk to your tax advisor about implications regarding settlements.
The creditors do often take a percentage, especially with the possibility of bankruptcy
that is correct
what percent, is the magic question.
They may want a budget worksheet to verify information before they agree.
Let me know if you have any other questions.
What might the budget worksheet look like? It would be pretty simple to produce a spreadsheet outlining my outstanding debts and my inability to pay. I'll have to ask my accountant about the relief of debt on my business cards...who gets the "income" if I settle with them personally. In otherwords, if I'm paying my company's debt, do those savings become income to me or the company.
That can vary with the creditor. they may want to verify assets and income and expenses before they agree to a settlement
If the bank settles on a business debt, it would depend on if the business is still filing taxes, etc. if so, income/debt could pass thru to you on a K1 statement etc.
Your accountant should be able to sort that out for you
Did you have any followup questions? if not, please click accept to close the question
So sorry for my delay in responding...got
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