Starting one’s own business is always a gamble. Sometimes you hit it big and become wildly successful, and other times you end up having to file for Chapter 7 bankruptcy. Even if you’ve done everything right, you could still find yourself in financial trouble. It may not even be your fault.
While not a story out of Georgia, a concerning situation that could happen to anyone recently came to light about a Minnesota businessman who had to file for bankruptcy. The man started a real estate company with a business partner who would later be convicted of fraud. The victim was unaware of his partner’s shady business dealings, which he says were unrelated to their real estate venture. Despite his lack of involvement in fraudulent business dealings that took place in an entirely different industry, the real estate agent had to file for Chapter 7 bankruptcy. He said the downturn in the housing market a few years ago was also major factor.
It’s very common for people to engage in business ventures with partners. Oftentimes people need investors to give them that kick start required to create a successful business. Unfortunately, business partners can create variables beyond your control. This victim’s story is not only a cautionary tale about knowing who you’re doing business with, but also utilizing the options available to you.
Facing creditor claims and liabilities in excess of $8 million, the victim could have been struggling with debt for the rest of his life. Instead, he chose to file for Chapter 7 bankruptcy, which can permanently wipe out some debts and give him a fresh financial start. While it may not solve all of his problems, Chapter 7 bankruptcy could be the first step on his road to debt relief. It’s an important option for anyone to keep in mind.
Source: Twin Cities Business, “Former Denny Hecker biz. Partner files for bankruptcy,” Jake Anderson, Jan. 20, 2014