Starting, growing, and maintaining a business is extremely difficult. It requires hard work, great business acumen, and a lot of luck. Unfortunately for some, outside forces including a slow economy and evolving markets make maintaining a business impossible. When a business starts struggling with debt the business owner can become extremely stressed and the business may start an inevitable downward spiral toward overwhelming debt.
One business found itself in this position and recently decided to close its doors and filed for bankruptcy. Astor & Black, a company that was dedicated to making custom suits, found itself with $1.66 million in assets but an overwhelming $8.53 million in debt. The business' largest creditors were the Department of Revenue in Colorado, Louisiana, North Carolina, and Missouri. Choosing to close the business, the company has opted to file for Chapter 7 bankruptcy.
Luckily for those facing similar challenges, Chapter 7 for businesses offers business owners an opportunity to obtain debt relief. Through the Chapter 7 process, the business is closed and its assets are sold. The revenue generated from the sale goes to creditors in order of their priority, but any remaining debt is forgiven. This liquidation allows the business owner a second chance at a financial start.
Filing bankruptcy may seem confusing and even scary. But an experienced bankruptcy attorney can explain the process in simple terms so the filer understands what will happen. After that, an attorney can help value assets and analyze debt and file the appropriate paperwork. He can represent the filer in bankruptcy court and ensure the filer's best interests are represented at all times. Then, the filer will be in a position to make the decisions necessary to reach the new start he needs to become financially healthy.
Source: Business First, "Astor & Black shuts down, declares bankruptcy," Dan Eaton, Aug. 30, 2013