Bankruptcy experts, need your help!!

Dimitri318

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i have a cousin that owns a small business and is in the hole pretty bad, with personal finances as well as business finances. He’s losing money every day and pretty much needs to stop the bleeding and the only way he knows to is to claim bankruptcy. But there’s so many different ones he doesn’t know what to do.

Is there anyone on here that has been through something like this that maybe has some advice? And if there are any professionals on here, could you message me and leave your phone number to get in touch to talk about how it exactly works? I’m willing to pay a consultation fee for him if I have to just so he can get an idea of what he’s looking at. Thanks ahead of time fellas.

Edit: sorry a little background info;

Owns a restaurant with his father and brother
Restaurant has been slowly declining for almost 2 years
Bills are 2 months past due and late every month
No money in business checking
He’s over $50,000 in personal debt bc he’s using his personal credit cards to keep the restaurant afloat bc his father is too prideful to shut down
Has only made $1,200 this year total working 80-90 hour weeks
All credit cards are maxed out and he’s flat broke
 
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JimCSHO

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Business and personal bankruptcy it sounds like.

It's been a long time since I practiced bankruptcy and some things changed.

Personal is chapter 7 or 13. Chapter 7 is more difficult today, but releases all debt. Chapter 13 is for a wage earner and pays down but doesn't release all.

Business has same options, chapter 11 is the restructuring option

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Dimitri318

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Business and personal bankruptcy it sounds like.

It's been a long time since I practiced bankruptcy and some things changed.

Personal is chapter 7 or 13. Chapter 7 is more difficult today, but releases all debt. Chapter 13 is for a wage earner and pays down but doesn't release all.

Business has same options, chapter 11 is the restructuring option

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How does it work with assets? I’ve seen mixed things online and from people. He has a mustang he’s still making payments on but has a VMP and other stuff he bought with a credit card sitting in the garage. Do they seize all your assets that you have? He lives with his parents. Would they show up and take all the mustang parts and stuff like that that is in his name? Sorry if it’s a dumb question, I haven’t the slightest idea how filing bankruptcy works
 

Khan

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Chapter 7 they will take his car and clean all debts for a clean slate except for things like student loans. Now if he has property ie house chapter 13 is better. I believe chapter 13 there is some kind of payment involved so as to not lose house.

For personal, chapter 7 is better. Did it 3 years ago by myself no attorneys or lawyers. Once you start the process, the bankruptcy court sends notice to your creditors basically telling them you are in bankruptcy process and to stop harassing you. Make sure you list all your creditors.

To be honest, best thing I have ever done. I thought life after bankruptcy was going to be shit but turned out pretty good. Well credit history went to shit but after year one credit history started going up. By end of year 2 I was in the 700s. Used 2 credit cards that I spend $15 on each every month and paid them off and one of those secured personal loans for $500 to build my credit. After 2 years I was able to purchase a house.

Bankruptcy sounds bad but depending with situation, can be best thing.
 

Khan

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If it is not mortgage or anything like that they won't seize it. So they won't come after Vmp. My cobra was paid off and I kept it.
 

JimCSHO

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For personal bankruptcy there are various exemptions. And if he is still paying on the car even in a Chapter 7 it is possible to get approval to reaffirm the loan and keep the car (still have to make the payments).

Things bought on credit cards can be challenged. The creditor may show up and claim you had no intent to pay the charges - in a Chapter 7 that is unusual but happened at times (typically was an attorney representing the creditor and just asked questions of every debtor during the cattle call of cases).
 

Dr. Gonzo

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He’s over $50,000 in personal debt bc he’s using his personal credit cards to keep the restaurant afloat bc his father is too prideful to shut down
Has only made $1,200 this year total working 80-90 hour weeks
All credit cards are maxed out and he’s flat broke

How does it work with assets? I’ve seen mixed things online and from people. He has a mustang he’s still making payments on but has a VMP and other stuff he bought with a credit card sitting in the garage. Do they seize all your assets that you have? He lives with his parents. Would they show up and take all the mustang parts and stuff like that that is in his name? Sorry if it’s a dumb question, I haven’t the slightest idea how filing bankruptcy works
4a7ab317be863b4b8aed1c46f2cf0f1a.jpg
 

Coiled03

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Is it just me, or could he sell this Mustang he's paying on, plus all the accessories in the garage, make a healthy dent in his debt, and maybe avoid bankruptcy altogether?

EDIT: Of course, he'd have to get out from under the restaurant, too.
 

7upstang

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Is it just me, or could he sell this Mustang he's paying on, plus all the accessories in the garage, make a healthy dent in his debt, and maybe avoid bankruptcy altogether?

EDIT: Of course, he'd have to get out from under the restaurant, too.

That's what I was thinking. Sign everything over to get his name off. Go get a job and start paying down debt.
 

ZEN357

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i have a cousin that owns a small business and is in the hole pretty bad, with personal finances as well as business finances. He’s losing money every day and pretty much needs to stop the bleeding and the only way he knows to is to claim bankruptcy. But there’s so many different ones he doesn’t know what to do.

Is there anyone on here that has been through something like this that maybe has some advice? And if there are any professionals on here, could you message me and leave your phone number to get in touch to talk about how it exactly works? I’m willing to pay a consultation fee for him if I have to just so he can get an idea of what he’s looking at. Thanks ahead of time fellas.

Edit: sorry a little background info;

Owns a restaurant with his father and brother
Restaurant has been slowly declining for almost 2 years
Bills are 2 months past due and late every month
No money in business checking
He’s over $50,000 in personal debt bc he’s using his personal credit cards to keep the restaurant afloat bc his father is too prideful to shut down
Has only made $1,200 this year total working 80-90 hour weeks
All credit cards are maxed out and he’s flat broke

Been through it after my divorce. He needs to file Chapter 7 personally and cut his losses. Then he needs to talk to an attorney about the business. Is his name on the ownership of the business? It may be difficult if he wants to file bankruptcy but his Father doesn't want to. First things first, he needs to stop financing the business with his credit card, stop that immediately and walk away from the business.
 

Blk04L

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Guess it just depends on how much he owes on the car/what's it worth.

If it's worth 25k and he owes 23k, is it worth selling?

Parts on the other hand need to sold asap
 

Dimitri318

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You (they)should really consult an attorney instead of the.. "forum experts."

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The reason he asked me is bc I tell him im internet friends with the smartest, richest, fastest guys on the planet that are on SVTperformance and of course he wanted me to ask here first.

But in all seriousness, that's the first thing I told him to do, get in touch with an actual bankruptcy lawyer instead of just asking friends and family, they get paid to do that for a reason.

Is it just me, or could he sell this Mustang he's paying on, plus all the accessories in the garage, make a healthy dent in his debt, and maybe avoid bankruptcy altogether?

EDIT: Of course, he'd have to get out from under the restaurant, too.

Told him this also, that that's the first thing he needs to do since his payment is around $450 and that money could be used to pay down the debt. Also for him to sell the VMP since its just sitting in his garage and him modding his cobra isn't gonna help him in the slightest way with the stress that the debt is bringing him.

Been through it after my divorce. He needs to file Chapter 7 personally and cut his losses. Then he needs to talk to an attorney about the business. Is his name on the ownership of the business? It may be difficult if he wants to file bankruptcy but his Father doesn't want to. First things first, he needs to stop financing the business with his credit card, stop that immediately and walk away from the business.

Actually found out today that he was never on the restaurant name, he just works for his father. I told him my opinion is that if his dad wants to keep going down with that sinking ship, then let him drowned. Im just like him and I love my mother and father and I was in a similar situation last year, but hes 31 years old and has most his life ahead of him. He was in school for Physical Therapy and his father said if he didn't come to work to help the family business then he would kick him out of the house. I told him to stay with me and to stay in school when that happened 4 years ago and he didn't listen and now he is in this position, imagine that.

Guess it just depends on how much he owes on the car/what's it worth.

If it's worth 25k and he owes 23k, is it worth selling?

Parts on the other hand need to sold asap

Yes it is worth selling, its still running and driving just fine and I showed him this thread and he realized how dumb it is to keep it and the parts and he will be selling it soon.

Are you sure its your “cousin”

Lol yes im sure. I have my own restaurant and went thru some other problems around 9-10 months ago but I never went thru with filing bankruptcy, I just got my shit together and turned my life around and am doing better.


Thanks for all the replies guys, I started a thread bc I figured their would be guys on here that know the differences between all different bankruptcy types and maybe people that personally had been through it. Its one thing to google something and it’s another thing to come on here and actually talk to people that have had experiences with different situations. What @Khan said, I honestly never would have figured that was possible, to fix your credit score and be buying a house within 2 years. Anytime I’ve heard about bankruptcy from anyone I know, people make it out to be like you failed, there’s no coming back from it, your credit is screwed for the rest of your life, stuff like that. And to hear something like khans story, I never would have thought that was possible but hey, that’s why I started the thread, I learned something new today. And I showed him the thread and I think he realized how dumb he is for keeping his car and all the parts then complains about debt. I guess he sees me building my turbo car and having a couple credit cards open as well, but I still get paid every week I told him lol.
 
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