Filing for bankruptcy to try and protect your business and erase your debts is a big decision, and it can impact clients and employees. The legal obligations that come with bankruptcy differ as well, so it’s important to discuss all the types and options available before taking steps toward a fresh financial start. Chapter 13 bankruptcy may benefit a company if there is still income coming in, so it is one option to consider.
Those in Wisconsin may be interested in knowing that a political candidate in another state has discussed how his Chapter 13 filings were a business decision. According to him, his printing company was in financial trouble after one of his most important customers leased their own copy machines, essentially losing him nearly $200,000 in lost business. His business’s income had been declining since 2007, from approximately $600,000 to less than $150,000 in 2011.
According to the candidate, he did not have time to make up the loss in business and eventually decided to file for Chapter 13 bankruptcy. The candidate stated that the payments to his creditors were too high, and he apparently fell five months behind at one point.
The man has said that voters shouldn’t punish him for his business troubles, because it gives him unique insight into the bankruptcy and budgeting process. He said the experience has made him more acutely aware of how to detect trouble early on and work to rectify it. And the bankruptcy filing has allowed him to get back on his feet. It shouldn’t be viewed as a stigma.
Source: The Burbank Leader, “Burbank City Council candidate says bankruptcy was a ‘business decision,'” Alene Tchekmedyian, Dec. 26, 2012