How often have you used your personal credit card to pay a business expense? Probably more than you would like to.
Using your personal credit card may be a quick fix to stave off a hassling creditor or ensure you receive that much needed good or service. However, in the long run it can have devastating effects on your personal financial position.
You have worked hard to save and plan for retirement. You have family commitments including dependants living in the family home. These are things you need to protect and not place at risk.
In many circumstances a director can avoid personal liability in relation to the debts incurred by a company. These are debts of the company and should remain so. If these debts are paid by using your personal credit card, the credit card company is a creditor of yours personally. The Company’s expense has been paid.
Using your personal credit card can result in you being exposed to recovery proceedings by the relevant institution/debt collectors and could eventually lead to a creditor’s petition being filed against you to declare you bankrupt for your credit card debt.
It can also have a strain on your personal finances, placing added pressure at home and affecting your family long before the debt collectors come looking for payment.
Bankruptcy for credit card debt can be avoided by seeking advice early in relation to the debts being incurred by your company which you are unable to pay as and when they fall due. Seeking professional advice early increases the options available, which include improving business performance, eliminating unnecessary expenses, orderly sale of non-performing or obsolete stock/plant and equipment, restructuring, informal workouts or a formal compromise with your creditors to achieve some breathing space to get your business back on track.
This situation is not all doom and gloom, there is light at the end of the tunnel. By sharing the stress of the situation with a professional advisor who is willing to stand by you during the hard times and take you on to greener pastures and avoid bankruptcy from credit card debt.
Corporate Lifeline can assist you in deciding how best to resolve these issues and are specialists in this area that you can talk to you about all the option available.
Contact us today on 1800 621 308 or contact us direct:
Kathleen – 0458 002 235
David – 0458 002 478
