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Former Boston Red Sox player is sued for bankruptcy

Business owners often invest their own money into a company start-up. Being financially liable can have its benefits, but it can also have a lot of negative repercussions if the business goes through financial problems. Being mindful of a competitive environment, many small business owners can struggle for years before making profits. In Massachusetts, some residents struggle with making basic payments on large loans. One option for a failing business is to enter into Chapter 7 bankruptcy.

For example, former Boston Red Sox Curt Schillings' company, 38 Studios, filed for Chapter 7 bankruptcy. The company, which produced video games, received a $75 million dollar loan from the state of Rhode Island. After the filing, Rhode Island's economic development agency sued the company. The company filed bankruptcy in June of 2012 with $150.7 million in liabilities and only $21.7 million in assets.

With high levels of debt, bankruptcy is one option for a business to consider. Being leveraged can add serious financial burden to the families of business owners who are personally responsible for debt. Chapter 7 bankruptcy is a liquidation of assets that offers an opportunity to pay off creditors.

Curt Schillings and his financial partners are facing a lawsuit in the wake of their Chapter 7 bankruptcy filing, but it is a special case. In Massachusetts, many small businesses are owned and operating by a few owners. Being financially liable for the losses of a business can add undue stress, turmoil and economic upheaval to a person's life. Getting back on track can start with filing for bankruptcy.

Source: Upstart Business, "Curt Schilling's 38 Studios screwed up so bad it may soon get its own law," Michael del Castillo, Jan. 31, 2014

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