Repayment, Settlement, Bankruptcy: Facing Debt from Failed Business

Dear Your Business Credit,

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I closed a small business that was set up as an S corporation and sold its assets. I now have $20,000 in cash but $45,000 in credit card debt with three different banks. The cards have high interest so the balances are increasing by more than monthly payments. Should I settle the debt or file for bankruptcy? 

- Linda

Dear Linda,

It may seem like your balance is increasing faster than your payments, but, given existing consumer-protection measures to prevent this scenario, which is called negative amortizationminimum payment that eliminates a borrower's principal

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