Comments on: The bankruptcy option that's right for you http://smallbusiness.blogs.cnnmoney.cnn.com/2008/01/29/the-bankruptcy-option-thats-right-for-you/ Editors from FSB magazine answer your pressing small-business questions. Tue, 15 Dec 2009 12:52:55 +0000 http://wordpress.com/ hourly 1 By: Scott Miller, Lakeland, FL http://smallbusiness.blogs.cnnmoney.cnn.com/2008/01/29/the-bankruptcy-option-thats-right-for-you/#comment-710 Scott Miller, Lakeland, FL Thu, 19 Jun 2008 17:07:19 +0000 http://askfsb.blogs.fsb.cnn.com/2008/01/29/the-bankruptcy-option-thats-right-for-you/#comment-710 I'm a real estate broker and former mortgage lender in central Florida, but I am NOT an attorney. I have a few ideas for you: I assume the $118K is separate from the real estate notes and mortgages. Allowing a foreclosure is not the best idea. You may still be liable for the balance between what is owed and what the property is eventually sold for - plus attorney's fees and such. This will prevent you from EVER getting another mortgage until settled. Even three years ago, multiple foreclosures and judgements were taboo from even the ridiculously lenient lenders (who are now all gone...) There are real estate brokers who are proficient in handling short sales, and welcome the opportunity. Yes, it's a lot of work, but if short sold, you may be out from under. In my experience, ironically, those who stop paying their mortgage find the short sale process more palatable to their lender, but you need an overall game plan, a current financial statement / budget. Once the 60 and 90 day lates happen, your credit is shot (for now). If you are making a short sale effort, many banks will work with you for a long time, afterall, if it's priced right, and marketed well and you can't sell it, how would they? Plus if you live there, it is being maintained. If you are not getting help with your lender, you are talking to the wrong person. It's not collections, it's loss mitigation. Everyone can't use chapter 7 bankruptcy in Florida, so you may be required to go into a repayment plan - 5 years? - check with an attorney. good news is that some lenders (FHA) will allow a mortgage after 2 years from discharge of bankruptcy, and most will allow it after 3 years PROVIDING your credit is squeeky clean. So you gcould be back in the game sooner with a BK than suffering through for years and ultimately paying everyone off in full. Strange world, huh? Remember, it's only money. Do what you must and move on. I'm a real estate broker and former mortgage lender in central Florida, but I am NOT an attorney. I have a few ideas for you:

I assume the $118K is separate from the real estate notes and mortgages. Allowing a foreclosure is not the best idea. You may still be liable for the balance between what is owed and what the property is eventually sold for – plus attorney's fees and such. This will prevent you from EVER getting another mortgage until settled. Even three years ago, multiple foreclosures and judgements were taboo from even the ridiculously lenient lenders (who are now all gone…)

There are real estate brokers who are proficient in handling short sales, and welcome the opportunity. Yes, it's a lot of work, but if short sold, you may be out from under. In my experience, ironically, those who stop paying their mortgage find the short sale process more palatable to their lender, but you need an overall game plan, a current financial statement / budget. Once the 60 and 90 day lates happen, your credit is shot (for now). If you are making a short sale effort, many banks will work with you for a long time, afterall, if it's priced right, and marketed well and you can't sell it, how would they? Plus if you live there, it is being maintained. If you are not getting help with your lender, you are talking to the wrong person. It's not collections, it's loss mitigation.

Everyone can't use chapter 7 bankruptcy in Florida, so you may be required to go into a repayment plan – 5 years? – check with an attorney. good news is that some lenders (FHA) will allow a mortgage after 2 years from discharge of bankruptcy, and most will allow it after 3 years PROVIDING your credit is squeeky clean. So you gcould be back in the game sooner with a BK than suffering through for years and ultimately paying everyone off in full. Strange world, huh?

Remember, it's only money. Do what you must and move on.

]]> By: randy west liberty ohio http://smallbusiness.blogs.cnnmoney.cnn.com/2008/01/29/the-bankruptcy-option-thats-right-for-you/#comment-506 randy west liberty ohio Thu, 20 Mar 2008 23:23:05 +0000 http://askfsb.blogs.fsb.cnn.com/2008/01/29/the-bankruptcy-option-thats-right-for-you/#comment-506 i went the chapter 13 what a mistake. pd out a lot of money credit was still bad when finished. not good. but i found something that worked i went the chapter 13 what a mistake. pd out a lot of money credit was still bad when finished. not good. but i found something that worked

]]> By: With Empathy in Simi Valley,CA http://smallbusiness.blogs.cnnmoney.cnn.com/2008/01/29/the-bankruptcy-option-thats-right-for-you/#comment-360 With Empathy in Simi Valley,CA Thu, 31 Jan 2008 08:26:48 +0000 http://askfsb.blogs.fsb.cnn.com/2008/01/29/the-bankruptcy-option-thats-right-for-you/#comment-360 Lisa, dont feel alone. I am online looking for answers to the same question. Different stuff going on but the same amount of credit card debt all related to a failed business. Small business is tough and it's only through the process of failing that we were able to see how our business is more about understanding business than about understanding what we do. If only we knew that 13 years ago when we started. How do we restart. Seems easy for the big companies but so tough for us. Good luck. I'd love to know the solution. Need it myself. Lisa, dont feel alone. I am online looking for answers to the same question. Different stuff going on but the same amount of credit card debt all related to a failed business. Small business is tough and it's only through the process of failing that we were able to see how our business is more about understanding business than about understanding what we do. If only we knew that 13 years ago when we started. How do we restart. Seems easy for the big companies but so tough for us. Good luck. I'd love to know the solution. Need it myself.

]]> By: Bill McLeod, Boston, MA http://smallbusiness.blogs.cnnmoney.cnn.com/2008/01/29/the-bankruptcy-option-thats-right-for-you/#comment-359 Bill McLeod, Boston, MA Wed, 30 Jan 2008 22:31:13 +0000 http://askfsb.blogs.fsb.cnn.com/2008/01/29/the-bankruptcy-option-thats-right-for-you/#comment-359 The only way an attorney can really evaluate whether bankruptcy is the best option is to look at all of the facts. That means income, expenses, debt, assets. It also means lifestyle, goals, and reality. No one should base a decision to file bankruptcy on the advice of anyone other than someone who understands the process, and can fully evaluate whether it really is the best option. My recommendation: get thee to a bankruptcy lawyer, pay for a consultation, bring all of your documents (bills, income and expense information, etc.), and go from there. The only way an attorney can really evaluate whether bankruptcy is the best option is to look at all of the facts. That means income, expenses, debt, assets. It also means lifestyle, goals, and reality. No one should base a decision to file bankruptcy on the advice of anyone other than someone who understands the process, and can fully evaluate whether it really is the best option.

My recommendation: get thee to a bankruptcy lawyer, pay for a consultation, bring all of your documents (bills, income and expense information, etc.), and go from there.

]]> By: Erik, Sebastopol CA http://smallbusiness.blogs.cnnmoney.cnn.com/2008/01/29/the-bankruptcy-option-thats-right-for-you/#comment-355 Erik, Sebastopol CA Wed, 30 Jan 2008 08:57:24 +0000 http://askfsb.blogs.fsb.cnn.com/2008/01/29/the-bankruptcy-option-thats-right-for-you/#comment-355 You stated that if you did a short sale you would still owe the bank $118,000. The bank isn't going to make you pay that back. Three ideas for you. 1) Let the property foreclose. Don't put anymore money into it. Nobody is winning when it comes to real estate. It's not your fault things turned around on you. Just because you are forclosing on a property doesn't mean you need to claim bankrupcy. The interest rate you are paying right now is not based on a personally guaranted loan, if it was your payments would be lower. 2) Spend money on property and try to do short sale. Agents don't like to touch short sales, so you may be wasting more time and money. 3) It sounds like you have other debts. I would suggest a chapter 7 not a chapter 13. Let all your property go. Focus on what makes you money. If you do a 7 you will be able to save up more money to invest when the economy picks back up, and you will have the cash. I know the value of the buisness goes into play on the chapter 7. It's probably worth less than you think it is. You stated that if you did a short sale you would still owe the bank $118,000. The bank isn't going to make you pay that back.

Three ideas for you.

1) Let the property foreclose. Don't put anymore money into it. Nobody is winning when it comes to real estate. It's not your fault things turned around on you. Just because you are forclosing on a property doesn't mean you need to claim bankrupcy.
The interest rate you are paying right now is not based on a personally guaranted loan, if it was your payments would be lower.

2) Spend money on property and try to do short sale. Agents don't like to touch short sales, so you may be wasting more time and money.

3) It sounds like you have other debts. I would suggest a chapter 7 not a chapter 13. Let all your property go. Focus on what makes you money. If you do a 7 you will be able to save up more money to invest when the economy picks back up, and you will have the cash. I know the value of the buisness goes into play on the chapter 7. It's probably worth less than you think it is.

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