I just realized that I've lived frugally for the past year and most of what I make goes into paying off some hasty decisions in 6 digits worth of (now) high APR credit card debt.

I've spent quite a few years doing the R&D in creating a new technology that I'm ready to take into a (funded) startup.

In doing so, I'd like to pass on the debt related to this R&D to the startup. (An idea that just occurred to me, as I realized the only reason why I would even give myself an industry-standard salary is to pay off debt.)

How might this work?

  • 2
    you (as the person) can sell the rights to the idea/code to your 'company', for any amount you think makes sense. your company takes a loan to pay you, and you use the money to pay off the credit card.
    – Aganju
    Dec 15, 2018 at 18:20
  • "6 digits worth of (now) high APR credit card debt" ouch yeah after a certain point people stop being able to relate and can't differentiate between consumer debt and investment debt on credit cards, and you're kind of stuck realizing that if you do default/BK people you need will judge you as if it was the most irresponsible consumptive spending. answer coming soon
    – CQM
    Dec 15, 2018 at 23:29

2 Answers 2


Assume it was someone else's company. Why would some random company take on your debt? It doesn't make sense at all. No company would do that. And as far as the tax man is concerned, your own company wouldn't do it either. So if you try to make your company take on your private debt, you will be in a lot of trouble.

On the other way, you spent years on R&D, and someone else's company might pay you a lot of money for the rights to that R&D. They might take a loan to pay you, then pay you, and you pay off your debt. That makes totally sense to everyone, including the tax man. And if your own company does the same, it is still the same.

So your own company can take a loan, pay you for the rights to your R&D, and you use the money to pay your debt. There is one problem though: Your company needs to convince a bank to give it the loan.

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    I think that the OP is talking about a start-up which the OP is setting up. The start-up has funding which in their theory could be used to "pay for" the time spent within R&D. Sounds dodgy to me but maybe legitimate if able to be legally implemented. This to me sounds to be a matter of business law and business finance rather than personal finance, but then I am new to this site. Dec 15, 2018 at 23:23
  • 1
    It actually is not unusual for a startup to cover a credit repayment for setup costs that may occur significant time before.
    – TomTom
    Dec 17, 2018 at 6:45

The startup could give you shares, this share grant would be taxed and you would still be illiquid, so the startup could also give you some cash on top of that. The total payment would be taxed but you can have enough to pay the tax and/or some of the credit card debt.

If done in January of a year, this gives you some breathing room for as many as 21 months before the IRS expects voluntary payment. But you have longer before the IRS unilaterally comes looking for you.

  • Nicely ignoring the fact that the tax is not an issue if the expenses are business expenses. Like "hey, i never did taxes, I have no clue, let me just answer" style.
    – TomTom
    Dec 17, 2018 at 6:46
  • @TomTom the expenses were in prior years and also the value to the startup can be much greater than OP paid, this leaves a tax footprint
    – CQM
    Dec 17, 2018 at 15:45
  • I'm not fully sure why CQM's answer got two downvotes - but @Tomtom perhaps you'd like to share an answer too?
    – ina
    Dec 18, 2018 at 4:15
  • @ina answers on this site are primarily popular opinion or a popular understanding, not the realm of possibilities or correctness. There is also a mentality here that an accurate answer should detail risks for the most conservative or financially unsavvy person. I don't give popular answers and I don't give details for a financially conservative person, I give enough information to inspire and validate with certified financial professional or legal team in a more optimal way of using their billable hours. So its a magnet for downvotes unless it coincidentally is the popular understanding.
    – CQM
    Dec 18, 2018 at 5:35

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