Bankruptcy Law

Bankruptcy Law Questions? Ask a Bankruptcy Lawyer.

Ask a Lawyer,
Get an Answer ASAP!

Bankruptcy Law
This answer was rated:

I live in Washington State. I am no longer able to pay my personal

credit card charges. As my...
I live in Washington State. I am no longer able to pay my personal credit card charges. As my business has failed, my business credit card companies have attempted to obtain payment from me personally (though I didn't sign a personal liability agreement)...I don't know whether those attempts are by a "stated or contract" debt collector. They have not made any attempt to sue my business.

I have no job now and my home & assets would seem to be covered by homestead protections.

My question involves the prospect of a settlement with my personal credit card companies. Given that bankruptcy would yield them nothing is it likely that they would accept a reduced balance offer...some blogs suggest as little as 25%?

I understand that my personal cards are one thing. It seems that if the business card companies can't prove that I am personally responsible for the debt then the issue can be resolved exclusively via my soon to be out-of-business business. However, if there is any prospect of those debts actually flowing to me personally that could complicate any settlement with my personal cards.

My question is ultimately whether I should simply try to negotiate the simple settlement with ALL of them? I don't understand the tax implications for me if I assume my companies debts.
Show More
Show Less
Ask Your Own Bankruptcy Law Question
Answered in 11 minutes by:
6/25/2013
Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2,914
Experience: Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
Verified

Terry L. :

Hi, thanks for your question. You should hire a lawyer for specific legal advice. No attorney client relationship is created here.

Terry L. :

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.

Terry L. :

Settlements are taxable, you are taxed as if the savings was income to you.

Terry L. :

Talk to your tax advisor about implications regarding settlements.

Terry L. :

The creditors do often take a percentage, especially with the possibility of bankruptcy

Terry L. :

that is correct

Terry L. :

what percent, is the magic question.

Terry L. :

They may want a budget worksheet to verify information before they agree.

Terry L. :

Let me know if you have any other questions.

Terry L. :

Thanks

Terry L. :

Terry

Customer:

Thanks Terry,

Customer:

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.

Terry L. :

That can vary with the creditor. they may want to verify assets and income and expenses before they agree to a settlement

Terry L. :

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.

Terry L. :

Your accountant should be able to sort that out for you

Terry L. :


Did you have any followup questions? if not, please click accept to close the question







thanks






Terry


Customer:

So sorry for my delay in responding...got

Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2,914
Experience: Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
Verified
Terry L. and 87 other Bankruptcy Law Specialists are ready to help you
Ask your own question now
Ask Terry L. Your Own Question
Terry L.
Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2,914
2,914 Satisfied Customers
Experience: Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.

Terry L. is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises!

Gary B.Edmond, OK

My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer.

EricRedwood City, CA

I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight.

MichaelWichita, KS

PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent.

Three H.Houston, TX

Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!!

ElaineAtlanta, GA

It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem.

TonyApopka, FL

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

< Previous | Next >

Meet the Experts:

Terry L.

Terry L.

Attorney

2,914 satisfied customers

Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.

cortrightlaw

cortrightlaw

Attorney

511 satisfied customers

Attorney practicing Bankruptcy Law including Chapter 7, Chapter 11, Chapter 12, and Chapter 13.

JoeLawyer

JoeLawyer

Attorney

376 satisfied customers

Attorney in the practice of Bankruptcy Law since 1996

A.J.

A.J.

Attorney

262 satisfied customers

Experienced consumer bankruptcy attorney.

Fritz

Fritz

Attorney

209 satisfied customers

Florida attorney with extensive experience in Chapter 7 and Chapter 13 consumer bankruptcy cases

Law Girl

Law Girl

Attorney

153 satisfied customers

I am an attorney.

Paul K, Esq.

Paul K, Esq.

Attorney

141 satisfied customers

10 years Exp., Great customer service, Prompt responses.

< Previous | Next >

Related Bankruptcy Law Questions
I am the buyer on a land contract. The seller wants to get
I am the buyer on a land contract. The seller wants to get out of the contract to go with another offer/contract. They have threatened to file bankruptcy if we do not accept a small fee to walk from o… read more
DrakeLAW
DrakeLAW
Juris Doctorate
978 satisfied customers
I live in NC and I opened a company to work on a project
I live in NC and I opened a company to work on a project with my brother for a company he has done work for in the past, located in Virginia. We completed the first project which was for servicing doo… read more
LegalGems
LegalGems
Juris Doctorate
10,717 satisfied customers
Can a creditor in a California bankruptcy proceeding who has
Can a creditor in a California bankruptcy proceeding who has entered into a post petition contract with the trustee in a chapter 7 case resend the contract if the trustee breeches the agreement. … read more
DrakeLAW
DrakeLAW
Juris Doctorate
978 satisfied customers
I prefer expert socrateaser or someone who has knowledge of
I prefer expert socrateaser or someone who has knowledge of SBA loan, business loan and business bankruptcy /personal bankruptcy.Currently I do not have any situation of financial hardship. But As I h… read more
PaulmoJD
PaulmoJD
Attorney At Law
Doctoral Degree
106 satisfied customers
Will my contracts with ATT, TV, and Cel phone be terminated
HI! will my contracts with ATT , TV, and Cel phone be terminated through bankruptcy 13 or 7? Thank you. … read more
LawGuy
LawGuy
Juris Doctor
123 satisfied customers
Can a non-filing spouse who was an independent contractor
Can a non-filing spouse who was an independent contractor (office staff/manager/bookkeeper/all duties) for a debtor's LLC be considered an insider for preferential payments?… read more
LegalGems
LegalGems
Juris Doctorate
10,717 satisfied customers
I have an sideline LLC and am considering a business loan
Hello, I have an sideline LLC and am considering a business loan and want to understand all the risks involved. Some additional background and then the question: I am single and have a house with a mo… read more
Legal Expert Justin
Legal Expert Justin
Law Degree
229 satisfied customers
I have a contract with a California corporation and the
I have a contract with a California corporation and the consideration are Pref shares of the company. There are three payments; an initial payment, 2 years later and 4 year later. Paid in thirds. The … read more
TJ, Esq.
TJ, Esq.
Juris Doctor (JD)
11,257 satisfied customers
Assignment of an executory contract in bankruptcy or a
Assignment of an executory contract in bankruptcy or a workout. If a corporation underwent an involuntary wind down. Say an ABC (Assignment for the benefit of Creditors) would the "sale of all or subs… read more
Phillips Esq.
Phillips Esq.
Attorney
Juris Doctor
18,356 satisfied customers
I have an Executory contract. A 10 year license of software.
I have an Executory contract. A 10 year license of software. We are the Licensor. The licensee has paid for the license with shares of its company (private). There are milestone payments. I believe th… read more
DrakeLAW
DrakeLAW
Juris Doctorate
978 satisfied customers
My husband has received a letter from SMS Financial, which
My husband has received a letter from SMS Financial, which is the assignee of the above referenced loan. To Kapco Communications (a defunct business) that was personally guaranteed by my Husband in 20… read more
Phillips Esq.
Phillips Esq.
Attorney
Juris Doctor
18,356 satisfied customers
Im being sued for a personal guarantee on a business
Im being sued for a personal guarantee on a business equipment that I returned. The amount is for the remeinder of the lease agreement.… read more
INFOLAWYER
INFOLAWYER
Partner
Doctoral Degree
56,297 satisfied customers
Can a debtor pick and choose which executory contracts they
Can a debtor pick and choose which executory contracts they want to either assume or reject in their bankruptcy schedule filing? Or do they need to assume all/reject all executory contracts.Also, is i… read more
Terry L.
Terry L.
Attorney
2,914 satisfied customers
If we have a co signer on a new car contract why do they
If we have a co signer on a new car contract why do they have to be included in a chapter 13 bankruptcy ?CS1… read more
TJ, Esq.
TJ, Esq.
Juris Doctor (JD)
11,257 satisfied customers
My husband and I signed a land contract on a house four
My husband and I signed a land contract on a house four years ago. A mortgage guy told both us and the home owner he could help us fix our credit to get us a loan in two years. He did nothing for almo… read more
KUMI95
KUMI95
Attorney
Doctoral Degree
17 satisfied customers
We sued a person for breach of contract, they filed
We sued a person for breach of contract, they filed bankruptcy right before the last court date so they didn't have to pay, can we re file the suit under a different cause. … read more
Ray
Ray
Lawyer
Doctoral Degree
30,877 satisfied customers
For a bankruptcy attorney. Let's say a person contracted
For a bankruptcy attorney. Hello, Let's say a person contracted with a business, and the business has filed bankruptcy. The business' bankruptcy attorney contacted the person and notified them that th… read more
Phillips Esq.
Phillips Esq.
Attorney
Juris Doctor
18,356 satisfied customers
I represent buyers that have signed land contracts for
I represent buyers that have signed land contracts for properties in Detroit, Michigan (seller financing) What's happen if the seller goes on bankruptcy before the end of the contract ? My clients wan… read more
DrakeLAW
DrakeLAW
Juris Doctorate
978 satisfied customers

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

Show MoreShow Less

Ask Your Question

x