If you own your own building for your Michigan business, what happens when you are about to go through a foreclosure? Foreclosures occur when you cannot pay your mortgage payments. When this happens, you may have other debts. What happens to your business debt?
Normally, when a person is going through a building foreclosure, this is not the only debt that he or she faces. If you were struggling to meet your mortgage payments, then odds are you were also struggling to make payments towards your other debts. While debt and foreclosure do not always go together, a person will often experience both.
The foreclosure does take care of some of your burden. It will be a loss due to the payments you already made says America’s Debt Help Organization. However, it does give you an opportunity to start rebuilding your finances from scratch.
The problem is that it is not going to change the fact that you may owe second mortgages if you ever took one out on the building. Your business debts remain, despite the foreclosure. Your debts to the lender of the building and your debts to other creditors remain separate. In addition to losing the money that you put into your investment, a foreclosure will also have an impact on your credit score. This means that it may be more difficult in the future to receive loans or to purchase credit cards for your business.
In some instances, if you have mounting business debt, you may want to consider bankruptcy at the same time.
None of the above is to be considered legal advice. It is for educational purposes only.