Assets & Debts – Net Worth +$7k, Monthly CC Payments Reduced!

Looking back, I wish I had filed for bankruptcy on the business side when I did my personal bankruptcy. The business was insolvent, but my pride didn’t want to “give up” on both fronts. So I kept the business going paper-wise, even though it ceased to exist in any functional manner.

I’ve been paying down my IRS accounts one by one this month. Basically, the IRS (for payroll taxes at least) treats each quarter as a separate file to them. I had 2 quarters from 2006 to resolve ($3800 total), which I’ve not paid off. 2007 is a little more complicated because I completely screwed up my taxes that year. My accountant is cleaning this up as we speak, and I will file amended returns for 2007 later next week. That should reduce the 2007 4 quarters balance down to around $10,000-$12,000, which is the correct amount vs. the $25K that I currently show owing for 2007.

I’m not going to pursue settling most of my old business debts that are in collections. Why? Well, for starters, the business no longer exists. And secondly, I haven’t heard a peep on those accounts (nearly all of them) in over a year. Not a single phone call. Not a single letter. I did settle a small account last month for $2,400, but beyond that, nothing.

And so, for my own sanity, I’m going to remove these accounts from my debts owed for the time being. I know they still exist, and I will at some point to resolve them, but for the time being I’m not going to focus on them.

I know this isn’t the moral high ground. I know that my business signed those papers (my personal liability was removed on them as I listed them all in my personal bankruptcy), and that I should repay the money. I know this. It’s not lost on me. These aren’t just going away.

I need to focus on repaying my mother first and foremost.

Current Debts

• Mom – $130,274
• IRS – $15,000 (aprox.)
• Student Loans – $34,015
• Toyota Financial – $8,295

Total: $187,584

I have a large federal tax bill due this month, around $9000. Which really kind of sucks, but I guess I should want to pay a lot of taxes, right? If I’m not paying taxes…I ain’t making any money!

I’ve arranged all my paperwork to dispute the IRS balance. I really screwed up doing my own taxes in 2006/2007. I hope to have that line eliminated sometime in May. I may still owe some, but more like 10K at the most, not $29,000 like I do currently. My accountant is booked this month, but said they will get to it after tax day. That should be fine.

I made my regular payments to my mother and on my student loans. I’m still deciding what to do on any of the collection accounts. I haven’t been contacted on any of those old business debts in a long time. Ideally I hope to settle those in the near term future.

On the asset side, I won’t comment much except to say…my tiny stock portfolio was up like 45% in March. No joke. I think I’m still down for the year, and I never should have bought stocks in the first place, but now I’m just going to let the small 2K account ride.

So what is up for February? Well, for one, I’m hoping to be able to eliminate a large line item on the liabilities section…the Shareholder item. Assuming everything goes according to plan, that will go away sometime towards the end of the month or early in March. This is going to be a HUGE relief for me. It’s a family friend, who never knew about all the stupid stuff I did. Buying him out is the first major step in me making things right with other peoples money. My Mom and other creditors being the next major ones. Anyway, I’m excited about this.

Observations

• Networth increases (or is it decreases when you are negative?) over 5%.
• Made extra student loan payments
• Made 2 IRS payments ($1200 total)
• Stock holdings got killed (No more money going towards that….)
• Need to make 2 car payments this week

Commentary

• IRS balance is up even after my 2nd payment. I thought my payment plan included 940 taxes. Nope. Got a new notice on this and added the 2006 balance for those to the IRS row.
• I emailed the large investor in my old business about buying him out of his stake in the company. I originally guessed 65K, but it will take 63K to do this. Hopefully I’ll be in a position to do this early next year. Investor seems OK with this. This would be a huge burden off my back. Like, super huge.
• I invested a bit of money into my sharebuilder account. Apparently I’m a much better stock picker now that I’m a buy and holder ’cause my account was actually up a bit from earlier in November. I was very hesitant to make this move, but feel confident I will not return to any old bad, day-trading habits.
• I’m now in a position to start making some settlement offers on that 86K number of old business debt. Over the next month or so I hope to severely knock that big number down.
• I’ve dropped my salary to myself down to less than 20K a year. Now that I’m on staff at the peer to peer lending leader, Lending Club, I don’t need to draw as large a salary from my business at least right now.
• I still have a long freakin’ way to go….

Wow, I didn’t realize how much stronger position I am in now than a year ago. I’m actually slightly impressed with myself. And that takes a lot. I’m definitely my biggest critic. So for a few moments here….yay me : ).

Commentary

• My cash position is not nearly as strong as it looks, though it is improved. I have lots of bills (mom payment, salary on the 30th, rent payment, contractor expenses) due in the next 4-5 days. That number will drop dramatically.
• My personal savings was down this month as I had a big negative cash flow expense when moving into my new place where I had to put down first, last + deposit.
• The Xb asset value was calculated with a tool from edmonds. With the mileage on the car (55K), that looks about right. Still upside down on it…at least it gets great gas mileage.
• The collections liability is an estimate, but a very darn close estimate. I haven’t received updated statements on some of the balances so exact figures were difficult. It’s very close though.
• I added the shareholder equity. Why? Because at some point I need to buy out the investors in my old business. So, it’s a debt. Not a traditional debt. But it needs to be there for me to feel this is a complete picture of everything.
• The Scion balance is not exact, but close to when I got a payoff amount from Toyota last month.

If you see an error in the numbers or a miscalculation, please let me know. I know there are some formatting errors, but I’m not too concerned about those, I think it turned out pretty well.