My DH has a business that he has been funding exclusively with credit cards. Up to now (5 years in), he's been able to make his minimum payments with his business income, but things have really dried up lately. His business remasters and reissues obscure old gospel recordings, and it's so hard to tell which recordings will take off and which won't. Last year the Black Crowes covered one of the songs on one of his releases, and he "spent" the money (that he expected to get) on a new release. He's supposed to get payments from the band (it was all negotiated with the record label, and they have a contract), but now he's getting the runaround, and the album didn't really do as well as I think they had hoped.
Anyway. Long story short, he has about 20k in credit cards, some in the business name and some iin his name. Income for this year will probably end up around 3k, although I suppose there's always hope that the latest release will start to sell a little better. Or that the Black Crowes will actually pay what they owe him without an expensive legal fight. Next year he'll make even less, unless he releases a new record, which he can't do without taking on more debt. The bottom line is that the business is effectively bankrupt already, but it's his baby and he's just not really able to see it.
Ok. So I'm trying to gather up all the information that might help him make a decision about what to do now. I've been googling this morning, and was freaked out to see that they could come after our house for payment, even with a bankruptcy! He incorporated as an LLC, but if I'm reading these advice sites correctly, he probably 'co-signed' for the credit cards using his personal credit, and so declaring bankruptcy for the business will not discharge that debt. So we would have to declare personal bankruptcy to get out of it. We have just about exactly 20k in equity in our house, so I'm not even sure if we are eligible for bankruptcy??
Does anyone know anything about LLC bankruptcy? Are there any gov't resources to help small businesses stay afloat? Any loan programs maybe? His cc debt is at very high rates now, because he has missed a few payments with Capital One, and they are pretty vicious, I guess...
Like I said, I know that we'll eventually have to see some kind of lawyer/acct type, but for right now I'm just trying to see what our options even are. Any ideas?