A person who starts a business in Texas must understand the risks and possibility that it might not succeed. When there is a failed business or the debts become too overwhelming to continue operating, a Chapter 7 bankruptcy is a viable option to move forward and not have the debts follow the person around for the rest of the person’s life. Chapter 7 bankruptcy is known as a liquidation bankruptcy and this must be fully comprehended before pursuing it as an option.
A company that specialized in turning vehicles into roving kitchens has filed for Chapter 7 bankruptcy. In its filing, the company stated that it had no assets and was saddled with liabilities of $1.2 million. The company is alleged to have been unable to fulfill its mission to customers and has been confronted with five lawsuits claiming that the company was paid to convert vehicles into food trucks, but did not complete the work and did not issue any refunds.
Since the company has filed for Chapter 7, those lawsuits have been placed on hold. According to the company’s revenue figures, it made approximately $1.9 million in 2013. There was no amount listed for 2014. For 2015, there was reported revenue of $355,000.
Regardless of allegations and the circumstances surrounding a filing for Chapter 7, those who are having financial issues with their business need to be aware of the options they have. Since Chapter 7 bankruptcy is a liquidation, the debts will likely be discharged if the legal criteria is met. This protects a home and other assets. Since the rules for filing for Chapter 7 have been tightened under the law in recent years, having legal help to understand eligibility is useful before moving forward with a filing.
In this case, a company that converts trucks to rolling kitchens is filing for Chapter 7 after financial and business-related problems made continuing untenable. Those who are facing similar issues should discuss Chapter 7 for businesses and whether it is right for them with an experienced legal professional.
Source: San Antonio Express News, “Kitchens on Wheels goes bankrupt,” Patrick Danner, Nov. 24, 2015