Archive for September, 2008

Submitting bankruptcy paperwork to lawyer

Friday, September 26th, 2008

Finally finished with all the paperwork! Whew! Since we own a business, all income, expenses, payments in last 6 months, all vendors (over 100) all business and personal credit cards, EVERYTHING has to be included. We must have spent 40+ hours getting all of the info and entering it into the online software interview.

I’m glad we did this, as I can see if you handed it over to an attorney that some could get missed or entered incorrectly. Especially if they have a lot of cases to deal with.

Now the attorney with review the info, and we will get together next week to review and sign the paperwork and actually file the case. I was hoping to get it done by the end of the month, but due to all the documentation it will take some time for him to review the entries.

We have decided on a personal bankruptcy, as opposed to business at this point as ALL debts to vendors, credit cards and even my business landlord are personally gauranteed. That means even if the business filed bankruptcy they could still come after me personally. I have no money!

We will have to see what happens to the business in the next couple months as sales are horrible, and we sre coming into our slower period of sales.

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Bill Collection phone calls

Monday, September 15th, 2008

Well, I had had posted before we have great credit. My wife and I have NEVER had a late payment in 24 years until recently when we stopped paying due to the upcoming bankruptcy. We are now falling 45 days past due on some credit cards as well as our mortgage.

The last few days the collection calls have started coming in. It appears they are auto-dialed so if you don’t answer the phone the calls come about once an hour. Most of them have caller ID hidden, which is a dead give-away.

Since we have not actually filed our bankruptcy case yet, I’m going to try and avoid them. Once we file, an “automatic stay” is put in place and they can not call you after they have been notified. You can also refer them to your lawyer to have them deal with it as well.

Nothing has shown up on our credit scores or credit reports yet as far as late payments.

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Filling out bankruptcy paperwork

Sunday, September 14th, 2008

Our bankruptcy lawyer uses software called mycasefile to have us enter all the required information. I kind of like this, as although the attorney is paid to do this… I read horror stories on the web about some lawyers missing important information, or having incorrect numbers, etc. that can really cause problems. This way we can see exactly what is entered and ensure nothing is missed or incorrect.

The lawyer will then review it, and we will go over it together to ensure everything is correct prior to the actual case filing.

If you are a “pro se” filer (i.e. filing on your own, and not with a lawyer) there are places online to get the correct documents and instructions. I’ll post these links at another time and/or edit this post with the info.

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Retaining a bankruptcy attorney

Friday, September 12th, 2008

Well… today was the day. As I mentioned before we were trying to get some financing to avoid having to file bankruptcy. However due to the current credit crunch, no financing came through. It’s time to retain our bankruptcy lawyer.

We chose to go with the last one we spoke with who was refered by my business attorney. The others we spoke with just didn’t give us that warm fuzzy feeling.

We supplied him with 6 months of bank statements, last years tax return, information on our car loan, etc. Our attorney charges a flat rate for a chapter 7, or a chapter 13 bankruptcy. Chapter 13 is about $1000 more than a chapter 7. We are in Florida, and I believe the amount a lawyer can charge is dictated by the laws. Of course if anything out of the ordinary happens during the course of the bankruptcy he charges a hourly rate in addition to the flat rate we already paid.

Based on preliminary information he thinks we will have to be in a chapter 13 plan. I really hope this isn’t the case as we have NO extra income. We already know we will have to surrender the house, as without the business there will be no way to make enough income to make the payment. This sucks! We are pushing for a chapter 7 but will need to do the means test required by the government.

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Bankruptcy looks inevitable

Monday, September 8th, 2008

Well the last several weeks, store sales have been dismal. I’m not able to pay myself (Which is how our house payent is paid) and based on input from multiple bankruptcy lawyers, I am not paying anything other than necessary bills. Like electric, etc. I am not paying vendors, credit cards, etc.

This is from a two-fold reason… first the income just isn’t there. But, what I found from the internet as well as the attorneys we spoke to, if you pay some bills and not other this can be seen by the court as preferential treatment. The court can actually take that money back to disperse it evenly.

Here’s an example… say I pay one credit card $1000, andother one $500 and skip a third one. The court can see this as preferentail treatment to certain creditors and take the money back from the two I paid. I suspect you don’t see it for credit cards… but say you repay a family member, or pay off a car. This can lead to trouble. The court usually looks back about 6 months, but can request much farther back.

Be sure to check out some of the books I recommended in This Post for details or more bankruptcy info.

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