Mother got summons by wells fargo

[creditjunkee]

originally posted this in the credit forum but was advised to ask it here in the business credit section.

 

hello all...need some advice to help my mother out. Mom owned a small fast food joint in Mississippi..she needed money and opened a businessline credit account from wells fargo bank. Got approved for 30k credit line in 2008. Used the money to fix up the business and maxed it out. She paid the 30k balance down to 22k and in 2009, she suffered a stroke and was hospitalized. During this time other family members continued to run her business. She tried to come back to work but with her condition and orders from doctor she could no longer do what she used to. Medical bills had piled up and she could no longer pay the businessline. Just today she recieved a summons of a civil suit from local attorney acting on behalf of wells fargo bank. Her business was family operated and since her absence, other family memebers ran it and paid themselves a paycheck. The business doesn't make alot of money, it basically makes enough to pay whoever works there a salary, and mom used to be one of them that recieved a paycheck for working there. Please help with any advice as to what options she has now. She can no longer work and the business is still in her name. Is filing Bankruptcy an option? What will they do to her. I wish I could help her financially but I cannot so I am here helping her this way. Also I don't really know the details of what the wells fargo businessline are. Don't know if it was a secured or unsecured debt but am looking into it. All I know is the credit card had her name and DBA (doing business as) the restaurant. Thanks for any advice.

[BRBiz]

With a civil suit she is screwed they can come after here for anything she has the only thing she can do is bankruptcy and that is the best option at this point. No way around it besides paying it off which she cant .

 

And iIshould add they can come after the business and try to take that and if she files bankruptcy the courts will force her to sell off the business any way , this is why people should always set up a corp or llc.

Edited February 9, 2010 by Brndnh721

[creditjunkee]

thanks brndnh721 for fast reply

 

The business operation is under her name, but the building itself is under a different family member's name. I don't know much about business but is there some kind of ownership transfer since she is no longer a part of that business? If thats possible, it would allow other family to keep and continue to operate the business right? Please forgive my lack of business knowledge.

Am also wondering if WF is willing to accept a very small payment plan or something like that. Mom applied for disability after stroke and was diagnosed with type1 diabetes and multiple sclerosis. Maybe if she gets approved for disability, she can use some of that money to pay them a little bit at a time. I wonder if they will accept something like that.

Edited February 9, 2010 by creditjunkee

[BRBiz]

thanks brndnh721 for fast reply

 

The business operation is under her name, but the building itself is under a different family member's name. I don't know much about business but is there some kind of ownership transfer since she is no longer a part of that business? If thats possible, it would allow other family to keep and continue to operate the business right? Please forgive my lack of business knowledge.

Am also wondering if WF is willing to accept a very small payment plan or something like that. Mom applied for disability after stroke and was diagnosed with type1 diabetes and multiple sclerosis. Maybe if she gets approved for disability, she can use some of that money to pay them a little bit at a time. I wonder if they will accept something like that.

 

First a small payment for these banks would probably be $1000 a month so forgot about that.

 

Since the biz is a sole prop in her name , some one would just have to switch everything into there name. Bank accounts, bills and so on and leave nothing in her name and she would then be cleared from any ties from the business and honestly BK is probably the best way to go.

[creditjunkee]

well i talked to her about bankruptcy, but i didn't know if bankruptcy would cause them to shut down the business because that would put 4 other family members out of work too. she said she has no problem filing bankruptcy if there was a way to keep the business for the rest of the family. But as far as doing what you mentioned about transferring, can that be used against her if they see that she transferred ownership after recieving a summons? I'm gonna read up on bankruptcy for her and see if theres a difference for a business type bankruptcy and what it involves. I am learning as we go.

[BRBiz]

well i talked to her about bankruptcy, but i didn't know if bankruptcy would cause them to shut down the business because that would put 4 other family members out of work too. she said she has no problem filing bankruptcy if there was a way to keep the business for the rest of the family. But as far as doing what you mentioned about transferring, can that be used against her if they see that she transferred ownership after recieving a summons? I'm gonna read up on bankruptcy for her and see if theres a difference for a business type bankruptcy and what it involves. I am learning as we go.

 

Transferring now wouldn't be a issue after a judgement it may be a issue so now is the time and I wouldn't be concerned with the bank coming after the business since it really doesn't make money any way but the court would force her to try to sell anything she owns like that. Business bankruptcy wouldn't be a option since the legal business is her , there is no corp or LLC to file bankruptcy. Transferr the business asap and then file bankruptcy and that way she doesn't own anything and has no income coming in and I'm assuming she hasn't been able to keep up with her other bills?

Does she own a home or have a mortgage? or any car payment

[creditjunkee]

I just found out that there is a "help I've been served" section. was wondering if admin can move this thread there cuz that would be a triple post ugh. sorry. will post in that section and have it linked here if possible.

 

Brndnh721, she does have a mortgage but its being paid by two family members since her stroke cuz they live there too, and she does have her name on a vehicle but its not hers. She used her name to purchase it for a family member and he is paying for that. She also has a few unsecured credit cards with about 13k debt thats all gone to collections. Other than those, I don't think she has her name tied to anything else. So since its a summons, she has to respond to that attorney within 30 days of notice or they get a default judgement. Would it be wise to transfer ownership, then start to file bankruptcy before the 30 days is up or should she still respond to the summons?

[BRBiz]

I just found out that there is a "help I've been served" section. was wondering if admin can move this thread there cuz that would be a triple post ugh. sorry. will post in that section and have it linked here if possible.

 

Brndnh721, she does have a mortgage but its being paid by two family members since her stroke cuz they live there too, and she does have her name on a vehicle but its not hers. She used her name to purchase it for a family member and he is paying for that. She also has a few unsecured credit cards with about 13k debt thats all gone to collections. Other than those, I don't think she has her name tied to anything else. So since its a summons, she has to respond to that attorney within 30 days of notice or they get a default judgement. Would it be wise to transfer ownership, then start to file bankruptcy before the 30 days is up or should she still respond to the summons?

 

She will have no problem keeping her house but they may want to see the car returned to the lender since it is in her name even though its not hers so if they is a way that loan could be transferred to some one else that should be done.

 

Transferr the business to some one asap, file for bankruptcy it will take a couple months atleast to get it taken care of and ingore the summons even if they get the judgement there is no money to get from her and then the bankruptcy will kick in and it wont be a issue any more. She has no wages to garnish any way and plus that takes awhile to do that in court.

[creditjunkee]

Will do, thank you again, I will report back soon.

[BRBiz]

Will do, thank you again, I will report back soon.

 

With all that other debt she has in collections those companies will be doing the same thing soon.

 

Good Luck.