There are times when people need to make a fresh start. This can be a change in career or making a difficult financial decision in Texas or elsewhere. Recently, one businesswoman decided she needed a fresh start when she left her position as an executive for Wal-Mart Stores Inc. in order to open her own day spa. Unfortunately, the woman required yet another fresh start when she ran into financial trouble that forced her to file for a Chapter 7 bankruptcy.
The businesswoman filed for bankruptcy in late November and listed a total of $402,396 in debt, which is mostly related to her spa business. The woman operated East Meets West Spa and Salon under EMW Enterprises Inc., which was named as a co-debtor in the woman's bankruptcy petition. The woman also owes $172,355 to a banking institution and $171,445 to a law firm who worked as a collector for the bank.
The money owed to the bank originates from a $300,000 loan that the woman and her husband took out in Sep. 2006. Her husband filed for Chapter 7 bankruptcy in March 2012. The bank moved for a foreclosure in early June and is asking for the spa equipment and furnishings, which served as collateral for the loan. A court judge recently ordered the couple to hand over the collateral to the bank.
By filing a Chapter 7 bankruptcy, the businesswoman will be allowed to discharge most if not all unsecured debts. However, this type of bankruptcy in Texas will force petitioners to liquidate all assets in order to repay creditors. Bankruptcy can be used for debt relief for personal as well as business debts. If one does not wish to liquidate his or her assets, then a Chapter 13 bankruptcy may be preferable. This type of bankruptcy allows petitioners to keep their assets, but will reorganize the debts owed into more manageable payments.
Source: Arkansas Business