Small Franchisees and Bankruptcy

| Mar 29, 2011 | Bankruptcy |

Many people have big ideas and a hopeful opportunity about starting a franchise such as a branch of a restaurant.  Maybe there is a large parent corporation, but the individual or husband and wife are offered a franchise and they take a chance.  Their very own restaurant to nourish, work their fingers to the bone, and watch grow.

Then the recession hit.  There are personal guarantees on SBA loans, personal assets that have been spent in order to try to make the business work, and often quite a bit of credit card and unsecured debt.  

It seems hopeless.  However, there is help.  Filing for protection under either Chapter 7 or Chapter 13 of the Bankruptcy Code can help good people who have experienced a failed business to obtain the relief they so desperately need.  Although debtors will be forced to undergo a Means Test analysis, most small business owners who are forced to shut the doors are able to pass the Means Test and file Chapter 7 Bankruptcy.