A struggling small business owner from Texas is getting a fresh start. The business operated for 12 years, but the owner was unable to recover after the Great Recession. He stated that the business was hit hard during the Recession and once his capital was diminished “there was no surviving.”
Unfortunately, this story is not uncommon. Small business owners continue to struggle to make ends meet after the Great Recession. This fact was highlighted by a recent story in the Houston Business Journal that shares the recent struggles of two businesses, one in Houston and the other in Huffman, that were unable to rebound from financial struggles.
How can I recover?
Business owners that find themselves in these situations have options. Various forms of debt relief may be available depending on your situation. There is a happy ending to the story shared above. The business owner is now working with other homebuilder businesses in the area. He began on the road to recovery by filing for relief through a Chapter 7 bankruptcy petition.
How does this type of bankruptcy work?
Essentially, this form of bankruptcy relief allows an applicant to discharge qualifying debts. If approved, a trustee is assigned to the case. This trustee reviews the assets and debts of the business. If available, company assets are generally sold to generate funds to put towards paying off the debts. Once this is done, the remaining debts are generally discharged. This means the business is no longer responsible for these debts.
The process will vary a bit for each case. In this particular case, the filing stated that there were no funds or assets available to put towards the debts. The assets that were available were used to cover the administrative expenses of the bankruptcy petition.
Is bankruptcy right for me?
There are some risks associated with bankruptcy. Determining if bankruptcy is the right path for your small business depends on the details of your situation. As a result, those considering bankruptcy are wise to discuss their options with an attorney.