Question: I think I have to file bankruptcy. I started a smoke shop business with a friend from college. I was an accountant and he managed a restaurant and we quit our jobs. We both love cigars, pipes, exotic tobaccos and cigarettes. We are always smoking something. We used to talk about cigars all the time and we thought that we could open our own smoke shop. So we started to put everything together to open the shop but things have not worked out.
We bought a lot of expensive cigars, pipes and tobaccos and we've looked at many locations. We also bought lighters and humidors. But I was expecting to get an insurance settlement from a car wreck to help me out. I thought I was going to get a lot of money because I broke 3 bones in the wreck. But I just found out that I'm not really getting that much. I'm only getting from the insurance company enough to cover my medical bills and just a little more.
So now I can't go forward with the new business. I have debts in excess of $60,000. I put everything on credit cards. I don't want to face lawsuits and harassment by creditors. I only made $16,000 last year. I really thought the insurance company was going to give me a lot of money.
Can I file bankruptcy even though we never opened the business? The debt is on my personal credit cards. I live in Johns Creek with my wife, who is bi-polar, and our 3 kids.
D.B. in Johns Creek
Answer: You can file for bankruptcy. The business does not have to be opened. Since you have personal debt on your credit cards, you should be able to eliminate the debt by filing either a chapter 7 or chapter 13 bankruptcy.
If the debt was solely in the name of the business, it could be most likely eliminated by filing a chapter 7 business bankruptcy.
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