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Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 4542
Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
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Hello, Let me start with letting you know I think this is

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Hello, Let me start with letting you know I think this is a long question... As short as possible story... I own a business in PA for 9 years. It's an LLC. Also a house. I have both up for sale 175K for house and 140K for business. I have been divorced for 2 years and I just can't afford all of these expenses with my one salary. I have used all of my credit on my credit cards, and can't get anymore credit. I can't refinance because I don't make enough money for the amount of my house. If I could just sell my business and house I can pay off my debt and work for someone else. I don't know if I should look into filing bankruptcy or keep putting off my creditors? Right now I am current with paying only minimum payments. I really really don't want to file bankruptcy. Any suggestions?

Rakhi Vasavada :

Dear Friend,

Hello and welcome. Thank you providing an opportunity to assist you.
Kindly remain online as I prepare your reply.

Rakhi Vasavada :

I think there are some points you need to consider and few things you need to do before you opt for bankruptcy. Filing for bankruptcy is best avoided but at the same time, one should not be averse to filing it for "strategic" purpose. Let me elaborate.

Rakhi Vasavada :

To begin with, if you are fine with selling your business and more importantly your house, it is certainly the good thing to do as it will make you debt free. You will have option to start afresh but at the same time, exercising this option will come at a cost. The cost here is letting your home go.

In such a case, you have another option as well. Sell off your business and that will pay of more than half of your debt. Now regarding home payments, the normally it is best advised to re-negotiate with your lender for softer payment terms.

Rakhi Vasavada :

If this does not work out, you may have another option as well. If you manage to sell your business and if you are not able to currently renegotiate the softer terms with your home lender, explore the possibility if you can continue to make payments and remain current. If you have better work for next few months to come, you can attempt to re-negotiate with your lender, your chances are high with the improved income.

Rakhi Vasavada :

If none of this work out then you are left with two options. First sell off both your business and home and start working for someone else, as you have mentioned in your question.

Second option is that if you are not willing to give up your home or do not wish to give up your home -- only here, bankruptcy comes in to play. by filing bankruptcy, you, like most debtors will be able to keep your home and keep off creditors.

Rakhi Vasavada :

However, before you apply, you need to know that in your State PA, ---- To qualify for Chapter 7 or Chapter 13 bankruptcy, you must show that you received credit counseling from an agency approved by the Bankruptcy Administrator during the six months prior to filing for bankruptcy.

Rakhi Vasavada :

I am sure this would help. You may leave a positive rating if this helps or feel absolutely free to revert back with a reply for further assistance. I would be more than happy to keep assisting you.

Warm Regards,

Customer: replied 3 years ago.

Thank You very much! I am fine with selling both my house and my business, I am actually quite happy to do so. It's been too much stress and I am welcoming the downsizing! However, I don't want to ruin my credit. And I don't want to owe people. I wonder if there is a way to borrow against the sale of either my home or the business or both?

Dear XXXXXa,

Hello and welcome again. Thank you for reverting back with a reply.

If that is your case and if you really welcome downsizing, then you much go ahead and sell both. I completely agree with you that bankruptcy will completely ruin your credit and leave your credit crippled for at least 7 years to come.

I am sorry but I do not see any legitimate and credible source to borrow against pending home sale. I have never seen such thing happening unless done on a very private basis. Otherwise, I do not see any commercial lender lending it without security or if you offer house at security, it would be subject to normal terms which you will not qualify OR you may lend up with very very high interest rates.

I am sure this would help. You may leave a positive rating if this helps or feel absolutely free to revert back with a reply for further assistance. I would be more than happy to keep assisting you.

Warm Regards
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