Though Chapter 7 bankruptcies often concern single individuals or couples that are deeply in debt, the amount of the filings can be of a significant sum. The filing for one family run company showed debts from $50 to 100 million with more than 100 creditors. One creditor alone made a claim for $56 million. The family was also sanctioned regarding a $21,461 debt to a Florida supplier.
The family originally attempted to reorganize its debts under a Chapter 11 filing. The family’s revenue was $11 million in 2010 and $10.58 million in 2011. However, likely because of the extreme nature of this claim, the judge in this matter decided to convert the filing from a Chapter 11 to a Chapter 7 bankruptcy.
Bankruptcy is meant to give the debtor a fresh start in order to continue pursuing opportunities one otherwise could not pursue in light of so much debt. The filing of a bankruptcy, however, is not a simple decision to make as the way a bankruptcy is handled can ultimately affect one’s financial future as well.
Sometimes care must be taken as to which bankruptcy filing one decides to pursue. Though Chapter 11 reorganization may appear the best possible option for a family that would like to continue running its business, it can result in difficulties for all parties involved if the reorganization plan cannot be successfully carried out. It’s for this reason that anyone considering filing for bankruptcy should have an in-depth conversation with an attorney that thoroughly understands bankruptcy laws and a debtor’s individual circumstances.
Source: Produce Retailer, “Liborio ordered into Chapter 7; PACA sanction lifted,” July 27, 2013