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Chapter 13 bankruptcy filed by restaurant co-owners

Facing extensive debt day in and day out can quickly begin to wear on a person in Pennsylvania, causing them to desperately seek debt relief. Two individuals in an out-of-state case recently found themselves in the red financially and thus decided to file for Chapter 13 bankruptcy. The husband and wife team co-own two restaurants.

In the couple’s bankruptcy case, assets of more than $400,000 are listed, while liabilities exceed $590,000. The creditors that hold unsecured claims against them include the Department of Employment Development in their state on the West Coast, which is owed nearly $9,500 in payroll-related taxes. Meanwhile, sales taxes of more than $92,000 are also owed. The two are also in debt to a food distributor for more than $23,000.

Chapter 13 bankruptcy doesn’t involve liquidation, thus making it distinct from Chapter 7 bankruptcy. Instead, a consumer who files for Chapter 13 bankruptcy can generally keep their personal property, assuming their plan for debt reorganization is approved by the Bankruptcy Court. The Chapter 13 process is typically more complex than that of Chapter 7 and thus can last three to five years. A few years are required to complete a Chapter 13 bankruptcy because the consumer must make a monthly payment to a bankruptcy trustee during the particular plan period.

The restaurant owners who recently filed for bankruptcy will have to pay more than $3,600 per month for 60 months. Even though people may strive to wipe out extensive debt on their own in Pennsylvania, their efforts are not always successful. For those that qualify, a Chapter 13 bankruptcy filing is a responsible way to confront debt that has become unmanageable without the necessity of a complete liquidation.

Source: thebusinessjournal.com, "Owners of two DiCicco's locations file for bankruptcy", Chuck Harvey, Aug. 18, 2014

Source: thebusinessjournal.com, "Owners of two DiCicco's locations file for bankruptcy", Chuck Harvey, Aug. 18, 2014

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