With my bankruptcy filing coming along, I’m starting to think of how I’m going to attack the debt that is underneath my business. It’s not a small amount by any means. Most of the original creditors are gone, replaced and or hired by collection agencies. The exception being the 0% credit cards at citibank that I negotiated earlier in the year. I have been continuing to pay those monthly amounts and it’s nice to know that the payments going out are going 100% to the principle.
My Strategy
I’m already beginning to get settlement offers from most of the debts I owe on the business side of things. They are mostly in the 70-80% range, and all but a few are still well outside what I can afford at the time being.
My biggest concern is the IRS. In my estimates I have about 6K in back taxes from 2006 to them, and another 5-6K thus far this year. The good thing about the IRS that I’ve discovered thus far is a.) they are very slow and b.) they are very willing to work with you when you call them. I already settled 2005 with them and found them shockingly easy to negotiate with. So, working out a payment plan with them will be my first step on reducing the business side of my debt fiasco. I hope to start discussions with them at the beginning of next year, once I have a better handle on what my business income is looking like.
The other debts I think I’m going to attack via the famous “snowball” method. Since they are nearly all in collections, and with the limited amount of funds (currently none) that I have to offer as a settlement, this seems like the best strategy. I know it will make me feel good to start settling some of these, with the smallest debt being just under $200, I think I should start there.
The Speed of The Attack
The speed at which I attack the business debts is going to vary depending on how the business is doing. If my Project A really shoots up and starts making some cash, I’ll be able to settle some of the smaller amounts right away. If things stay at the level the business is at right now…I can probably only save maybe $500-$1000 a month toward a settlement fund. But, it’s a start.
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I guess this is how Casey Serin got himself into trouble — too much information.
if you had not mentioned the money that you were paying back to your mom, the bankruptcy trustee would not have been able to use google to fine the same information. At this point, it is out there for the whole world to see.
I applaud you for being so open with your situation. However, in the end, it may come back to haunt you.
I would actually start with the IRS payments. As you probably know from your bankruptcy attorney, your unsecured debt (credit card debt, car loans above the value of your car) will be wiped out in bankruptcy. However, there are some debts you can't cut loose: Taxes and student loan debt are two of these types.
When I say wiped out, I mean insofar as you can't make monthly payments on them. (I'll bet you are not going to be asked to pay even a fraction of unsecured debt, given your debt to income ratio).
I will be starting with the IRS first. The BK should wipe out my personal debts, but not my business ones.
Hi,
I think it has been mentioned before. However, you could get yourself in trouble by not listing your Mom's portion of your debt (even though you don't consider it debt). Payments going to your mom may not be kosher after having all your personal debt wiped away. Also, is your business considered an asset during your personal bankruptcy? It would be interesting to follow up on the BK attorney's advice.
Thanks and good luck!
I agree with Kevin. If you omit the money that you owe your mother it create a rift in your relationship.