Negative net worth, deep in debt, struggling business...

[Tim Kersting]

hello all,

I'm looking for some advice.... Why else would I be starting such a threat... LOL.

Basically, as the subject line indicates, my business is not producing as much as it needs to financially. For the last five years or so our efforts to pay down debt have been mildly successful, but it seems as though we've been borrowing from Peter to pay Paul. We had what appeared to be a really good year for the business, but ended up not paying enough in quarterly taxes to the IRS... Fast forward to now... In addition to unsecured debt payments we now have a pretty substantial monthly payment going to the IRS.

As far as numbers go; we are looking at owing a sum of about $68,000 in total. This includes about 17,000 to the IRS, a loan for a truck for business with a balance of about $12,000 and the rest is mostly credit card debt. I do have a few thousand in IRA accounts and emergency savings. And I'm a renter...

I've been exploring some ways to jump start getting this stuff paid down. Because I am a sole proprietor with no employees I can only take on so much more work to MAKE more money, so that's not really an option here, or at least it has its limitations....me. I have looked into possibly selling off a piece of my business that isn't making as much as other parts. By my estimation I can sell a certain piece for about $18,000 which translates to about $11,500 after taxes. 

This seems to be a pretty promising idea, but here's where it gets a little tricky for me... where would be the best place to direct that sum of money? I already don't have the debt to income ratio to even think about real estate at this time... Let alone when I sell off that piece of my business my debt to income on paper will be even worse.

 Do I take do I take the approach of paying off the highest interest first? Or is it better to pay off total balances?

I know this isn't exactly a real estate question or concern... But eventually that is my goal to be able to pick up at least one multi-family property that I can house hack.

I got into business like many others ignorant of the ins and outs of taxes and accounting. I take full responsibility for the debt that I owe, and I'm working my very hardest to get it paid off... It just seems like there's something that I'm not seeing. Unfortunately, I can't afford to pay an accountant so the best I can do is reach out to smart people on BP and gather as much of a working knowledge as I work in harmony with my goals.

Any help, advise, or helpful suggestions are very much appreciated.