Many Tennessee business owners have felt the sting of overwhelming debt. Business environments can change rapidly, and a company that was once profitable can quickly drown in unpaid bills. A comic book outlet from Nebraska recently filed for Chapter 7 bankruptcy after too many negative events caused the company to collapse.
The company, Meyer & Sons Mail Order Comics, has less than $50,000 in assets but its debt is close to $1 million. Meyer & Sons was once at the top of its game. The company was selling thousands of comics on a weekly basis and even had customers in South America. But some online tools - meant to improve customer shopping experience - were problematic and ultimately expensive. New comic books sat on shelves and sales fell by 50 percent. Customer orders were being reduced and gas prices affect shipping costs. Then, to top it all off, the company was forced to move.
In a Chapter 7 bankruptcy, a company is liquidated. This means that assets are sold so that the profits go toward the creditors. But according to Meyer & Sons petition, the company believes that there will be no assets for creditors.
A Chapter 7 bankruptcy discharges most debts. Some exceptions exist, such as if the debtor committed a crime or failed to keep adequate financial record but for the most part, bankruptcy is the only option to get rid of massive debt. With $1 million of debt, the comic store outlet may not be able to repay the debt. Bankruptcy allows the debtor to be free of the debt so he or she can start anew.
Source: Omaha.com, "Bankruptcy filings tied to mail-order comic book outlet, Tommy Colina's Kitchen," Russell Hubbard, Feb. 1, 2014