Many Tennessee companies may not fully understand their bankruptcy options. For example, they may be under the impression that Chapter 11 and 13 are the only types to choose from. However, companies operating under a sole proprietorship or general partnership have the option to file for Chapter 7 bankruptcy. Audioplex Technology Inc., a manufacturer of multiroom audio devices, is using Chapter 7 to wipe away its overwhelming debt.
People run into serious financial problems for a variety of reasons: medical debt, mortgage debt, student loans, credit card debt and back taxes, to name only a few. That probably isn't news to a lot of people in Tennessee. It was recently reported that our state has the nation's highest bankruptcy filing rate per capita, at 6.7 filings per 1,000 residents. There is no shame in those numbers; forgiveness of debt is just about as old as debt itself.
With all of the recent discussion of gun rights in the U.S., East Tennessee residents might find a recent bankruptcy case intriguing. There is liability attached to gun ownership and gun sales. So how does a business that deals with and owns guns handle Chapter 7 liquidation?
Bad economic times can sometimes drive Tennessee businesses into financial tailspins. Chapter 7 bankruptcy enables business owners to liquidate assets and pay off as many creditors as possible. Bankruptcy proceedings can be complicated by accusations of waste and mismanagement if a business with significant positive cash flow in the past claims to have no assets left at the time of filing.
Debilitating workplace injuries can result in victims and their families losing their livelihoods or loved ones, but there are legal remedies that can be pursued. However, even when an accident victim is awarded significant compensation by a court, that person is not immune to bankruptcy further on down the road.
If someone is facing overwhelming debt, Chapter 7 bankruptcy may be an option. Financial challenges can affect people from all walks of life, including those who claim to be finance savvy.
Tennessee readers who find themselves in debt may feel a little better about their financial situation when they hear about the massive debt accrued by a popular Arkansas college football coach. Recently released documents show that the coach has debts totaling in excess of $25 million, while his assets are only around $1.2 million. The records show that the man owes the majority of this debt - around $20 million - to a single entity in Louisville.
What if a business that processes or treats customers' possessions files for bankruptcy? For instance, what if a jewelry cleaning business or, in one recent case, a hide tannery has to close down? What happens to the jewelry or hides sent in by customers?
A bankruptcy judge in Nashville, Tennessee has ordered David Darnell Brown, also known as Young Buck of the rap group G-Unit, to change his Chapter 11 bankruptcy to Chapter 7 liquidation. Brown attempted to file for Chapter 11 by reorganizing his financial situation with a restructured contract with G-Unit Records.
There are many established Tennessee companies that seek bankruptcy protection, for a variety of reasons. The decision to file may have nothing to do with poor business decisions or poor financial management. Instead, it may simply be a case of rising costs and diminished sales. In those situations, business bankruptcy offers debt relief and an opportunity to get a fresh start. Recently, Borders Book Store filed for bankruptcy relief after failing to find any buyers for the business.