I owned a business that ended recently. I gave all the business equipment I had to the bank I had loans with and that I signed a personal guarantee with. I informed them I would try to repay if they let me keep minimal tools to start over; they didn't want to do that. Now the stuff has been auctioned off for considerably less than what's owed and I'm on the verge of losing my home and barely keeping food on the table. Now the bank wants to know how I plan to repay them. I've sold what little I had that was worth anything just to survive and pay bills; i don't have anything to give them. Should I be thinking about filing bankruptcy even though I have nothing to take but my home? If I don't file, what can they do to me? I'm sure the bank will be taking me to court as it is a large sum still owed.
-- Anonymous
A.
Your situation is a difficult one and it sounds like bankruptcy may be one of your only options at this point. Unfortunately, it is also apparent that you waited too long before going to see a bankruptcy attorney. It is never too early to do so, but waiting too long can severely limit one's options.
In this situation, if you had gone to a bankruptcy attorney once you knew your business was in trouble, you may have been able to file a bankruptcy petition under Chapter 11 or similar provisions of the federal bankruptcy laws that would have imposed an "automatic stay." The "automatic stay" would have given you temporary relief from your creditors so as to allow you the chance to try to restructure your debt and reorganize your business. Now it is too late since you have ended the business and turned all your tools over the bank. You could challenge the appropriateness of the repossession and subsequent sale of the tools, but you would be fighting an uphill battle. Even though it is late in the game, go see a bankruptcy attorney immediately. He or she may recommend at this point that you file a Chapter 7 liquidation proceeding. Hopefully, you will be able to save your house in the process.
