Sometimes businesses grow quickly and experience phenomenal business results for a long time, and then start to lose money and customers as other companies pop up. Unfortunately, even a higher power couldn't save popular religious chain Family Christian Stores from filing for Chapter 11 bankruptcy. The company, which has stores in Tennessee and 35 other states, experienced a major decrease in cash flow starting six years ago, after the recession hit.
Tennessee consumers generally have two main options for filing for bankruptcy: Chapter 7 and Chapter 13. What many do not know, however, is that there is another option, but it is used quite rarely. Chapter 11 is generally reserved for a business bankruptcy, but individuals can use it in certain situations.
Although it may seem as though the economy is starting to pick up, many companies still struggle with day-to-day business. Unemployment, credit card debt, divorce, college tuition and other factors can cause consumers to spend less. When this happens, businesses suffer. They lose profits and become unable to pay bills. The next step? Bankruptcy. While bankruptcy may seem like a bad word to some business owners, Chapter 11 bankruptcy - a type of bankruptcy for businesses - can actually help a struggling company stay afloat.
Many Tennessee entrepreneurs are able to sustain their businesses for a few years before the novelty wears off and they start losing customers. Consumers are always looking for the next big thing, so when they stop buying a particular product, companies start losing money. Of course, it's common for companies to have their ups and downs during the course of the business. But when business drops steadily - with very little chance of becoming profitable again - a business bankruptcy may be the only option. But is this option only for large corporations or can start-ups and small businesses benefit from Chapter 11 bankruptcy as well?
How would Tennessee college students feel if their school suddenly closed? That is the news that thousands of students across the country recently heard when for-profit Anthem Education filed for business bankruptcy in late August. The college and career institute chain had 41 campuses before bankruptcy filing and hopes to keep 28 of them in operation. However, the campuses are no longer eligible for federal student aid, which accounts for 90 percent of their revenues.