Any number of situations can drive a person into financial difficulty. As the economy continues slowly recover, many people are still feeling the side effects of the recession and a weak business cycle. When debts reach unsustainable levels, filing for bankruptcy might become the best-available option.
In November, Pennsylvania-based Norton Oil Co. was forced to shut down after excessive debts bogged the company down. At this point, restructuring under Chapter 11 was not an option. Since that happened, the company's owner, Richard Norton, and his wife have filed for personal bankruptcy.
According to Norton's Chapter 7 bankruptcy filing, most of the debt is related to his business. It's estimated that the business owner has $553,000 in secured debt and more than $704,000 worth of unsecured debt. At this point, Norton and his family cannot continue to service their debts while meeting other expenses.
By filing Chapter 7, the Nortons will likely liquidate some of their assets in order to satisfy creditors. This is one of the defining characteristics of this particular type of personal bankruptcy. In addition, they will be able to discharge a large share of their debt in order to wipe the slate clean and begin to work toward financial stability.
Business owners often have so much of their life tied into the business. Despite efforts to work hard and stay in the black, debt can accumulate. As this case shows, even someone who has spent years in business handling money can fall into financial distress. Sometimes there are simply uncontrollable circumstances that can cause a person to consider ways to find effective, lasting debt relief.
Source: LehighValleyLive.com, "Richard Norton, owner of Norton Oil Co., files for Chapter 7 bankruptcy," Matthew Bultman, Dec. 18, 2013