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Columbia business owners: Bankruptcy could help save business

Many Columbia business owners have been affected by the current economic climate, and have suffered large financial losses since the beginning of the most recent recession. For some owners, plunging revenue combined with a slow economy forces them to make the decision to declare bankruptcy. Such is the case for a used car dealership that cited declining revenue as a reason for their recent Chapter 7 filing.

The car dealership reported a debt of $1.76 million and assets lower than $9,000. Their greatest outside debt belonged to an automotive auction company and is listed as $600,000. However, they also owe the company president and majority owner over $1 million. The remainder of the debt is broken down into lesser amounts due among a range of creditors within the automotive trade.

The company has suffered declining revenue for the past two years. In 2010, they reported revenue of $12.2 million; however, in 2011, the dealership's revenue slipped by approximately $4 million. In the current year, they have only brought in $1.6 million to date, a significant loss compared with revenues for 2010. Declining revenue in a business can be difficult to offset or overcome.

Fortunately, options exist for business owners who find themselves in this situation. Different types of bankruptcy can address a variety of financial scenarios. Bankruptcy can allow Columbia business owners the opportunity to discharge their debts and liquidate the business, or give owners the flexibility needed to restructure their existing debt and remain open for businesses while rebuilding financial stability. Knowing one's legal rights as they pertain to bankruptcy can help an owner make informed financial decisions on how to best preserve their business interests.

Source: Triangle Business Journal, "Car dealer files for bankruptcy," Chris Bagley, Aug. 17, 2012

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