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Companies operating a nursing home file for Chapter 7 bankruptcy

Keeping a business afloat can be extremely difficult. Market forces outside of a business owner's control, including low demand and competitors with lower operating costs, might lead to unexpected financial challenges. When bills go unpaid, creditor harassment may leave a business owner stressed and not knowing where to turn. Perhaps the best place to turn is to an attorney whom can help the business owner seek a fresh financial start through Chapter 7 bankruptcy.

Four companies that operated a nursing home are doing just that after they became unable to pay on a $3.2 million loan used to purchase property. Even after selling the property back to the bank for $2.1 million, the companies still owed the bank $1.4 million. All the companies listed between one and 49 creditors with liabilities in the range of $1 million to $10 million. Their assets were listed at between $0 and $50,000.

Chapter 7 for businesses can be a real solution to overwhelming debt. When a business decides to go through the Chapter 7 process, they will perform what is known as liquidation. Liquidation means the business will close and assets will be auctioned off. Proceeds from the auction will be used to pay off debt owed to creditors in order of their priority. Once all assets are liquidated any remaining debt may be eliminated.

The idea of filing for bankruptcy is often scary to business owners and individuals alike. They may feel as if they have failed and will never get back on their feet again. This is not true. We all deserve second chances and Chapter 7 bankruptcy allows individuals that opportunity.

By consulting with a bankruptcy attorney, a business struggling with debt can become familiar with the process and make fully informed decisions in its best interest. Then, with the help of an attorney, the process will hopefully play out smoothly and that second chance will be reached.

Source: St. Louis Business Journal, "St. Louis assisted living facility owners file for bankruptcy," Jacob Kirn, Sep. 25, 2013

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