Financial Questions and Accounting Help > My husband owns a manufacturing CORP. . His customers used ... >

My husband owns a manufacturing CORP. . His customers used to pay in 30 to 45 days, now, it is 120 plus. Everyone is in the same boat their customers aren''t paying them , they can"t pay him, we don''t get a paycheck. We had to sell our house, and we are now renting. We are barely able to pay the rent and utilities. Co. bills as well as personal bills are not getting paid. We looked into bankruptcy, but we own a commercial bldg.(which has been on the market for 5 mo. and is not selling) so bankruptcy is out of the question. What can we do? We also had to drop our medical Ins. because the premium was 2400. monthly. My husband has een in business for 38 years. He is 61 years old.

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Connecticut

Customer (name blocked for privacy)

I have thought about your situation. Your alternatives are limited under your current circumstances.

One important point to keep in mind is that you MUST maintain the separation of finances between your corporation and your personal assets. If your corporation must declare bankruptcy or be liquidated, you don't want that event to "spill over" into your personal life (beyond the absence of a paycheck from the corporation).

You are likely going to have to reduce the asking price on your commercial building - monthly - until you find a buyer. This is a real life "Monopoly" situation in that you need income to live on, your corporation isn't providing it, and you may have to sell your personal real estate to have income to live on.

If the corporation situation is hopeless, you and your husband should consider working for someone else in a field where your knowledge and experience is of value. Of course this is frustrating after 38 years in business for yourself, but "You gotta do what you gotta do".

If the corporation itself can be sold, or if the assets can be liquidated in an orderly manner, there is another possible source of revenue. It could be that right now the assets of the corporation are worth more than the corporation itself as a going concern.

Suppose your commercial building sells. If you really are going to keep your corporate and personal assets separate, DON'T use your personal assets to keep the corporation operating at a loss. You will eventually lose both if the local economy doesn't improve.

I hope these thoughts provide some objective clarity for you.

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