Hi everyone,

My parents purchased a small business from a family friend a few years ago. It was doing OK for the first year, but for a good while now its been dragging progressively. They live in a town of around 35,000 and it just won't support the business. They purchased a new building about a year ago for their craft store and a newer car(not the best idea they had, I tried to tell them not to). Well, now the business isn't doing well, and with their business credit cards their payments are incredible. I moved to a different state for employment after graduating college 7 months ago, and I feel horrible. Its like sitting in the stands while your team is losing. I've been trying to help them put more things on eBay as a small source of income. I am scraping by myself, but I try to send back everything I can, but their credit cards ca. My mother told me today that after their taxes were done they were going to look into bankruptcy. My mother told me that the bank put a lien on their home for the small business loan they have. Is their anything that they could do to protect their home? I told them to look into credit counseling or debt relief but I don't know if they did. They were going to look into refinancing their home, but is their anything else that could be done? Thank you everyone so much for your help, Matt A.

Hello Matt:

The answer to your question is, it depends... Indeed, it depends on LOTS of factors. Did they incorporate? What state do they live in? Did they put their house up as collatoral? Is this a credit card loan?? Did they have an attorney? Did they do this, or that, or one of 20 different things that would have made a difference?

From what I gather, they've done NONE of those things. Given that assessment, they are vulnerable.

There ARE things that can be done to help them. However, I don't know about the details of their business, so I can't make any recommendation there. And, since they've refused your help before, I doubt they'll accept it this time.

Some people just don't want to be saved. Sorry it's your parents.

excon

It sounds like they are using personal guarnatee for the loans, and did not set up a LLC or incorporate to protect their personal money.

And a city the size of 35,000 can support any type of business ( that is a fairly nice size city, esp if you include the county area around it.

We have a craft store that does fairly well in a town of 5000. Do they have groups that meet there for projects, children programs on Saturday all sort of marketing ideas. And often when one person is selling a business it is a sign they are not making enough money either.

It can be anything from them not being good at managing a business to so many things.

But at this point, they need to act now before they lose everything ( unless it is too late already) A attorney who can look at the business is importatn at this point