Legal Question in Business Law in Iowa

What can we do?

In late 2005, my partner and I set up an internet sales business with the hopes of developing a work-from-home opportunity. Our business was formed as an LLC, in the State of Iowa and involves just the two of us.

Since the beginning, each year the company operated at a loss and had a growing debt. For the past several months, we have produced very little income. We have cut most of our reoccurring monthly expenses, but have about 30K in business debt. Our current sales do not cover our remaining expenses and credit payments.

We have been denied any more credit (understandably) and cannot afford to keep this going with personal funds. What are our options? And, which option has the least impact on our personal finances and credit.

Sincerely:

Which End Is Up?


Asked on 3/11/08, 4:47 pm

1 Answer from Attorneys
Thomas Moens Moens Law Offices, Chartered

Re: What can we do?

I would imagine that you have personally guaranteed the debts, which means you are personally responsible for paying them. You may need to seek other employment to pay these debts if this is the case. If it is absolutely impossible for you to pay them even with other income, bankruptcy may be your only alternative. Some lender may be able to work with you--and some will not. If the debts are all solely in the name of the LLC, bankruptcy of the LLC might be an option, but this also could prove problematic, so you would want to thoroughly discuss this with a bankrupcty and/or business attorney.

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Answered on 3/12/08, 5:17 pm


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