If a Mississippi business runs into financial trouble, there may be several options available to help restore stability. When a company’s liabilities far outweigh its assets, and business is not thriving, an owner might determine it best to pursue Chapter 7 bankruptcy. This debt relief program enables a business to liquidate its assets, then use the proceeds to pay back creditors.
Vista College has filed a bankruptcy claim
Owners of Vista College, which is located in another state, say that the school owes anywhere from one to 45 creditors money. The school’s assets are estimated to be between $10 million and $50 million, with estimated liabilities of an equal amount. Vista College owners filed a Chapter 7 bankruptcy claim a day after one of its students filed a lawsuit against the school seeking $1 million in damages.
Student wants repaid for tuition, supplies and more
The student who filed the lawsuit informed the court that she has invested approximately $10,000 for textbooks and school supplies, along with taking out a $15,000 loan for tuition. The student has also requested that the school pay her legal fees.
Chapter 7 bankruptcy activates a stay against litigation
When someone in Mississippi or elsewhere files for Chapter 7 bankruptcy, it typically places a stay against civil lawsuits. Chapter 7 is a program that is often available to individuals, as well as businesses or corporations. Any business owner who is considering filing for bankruptcy and has questions regarding litigation, debt collection or other legal issues may seek consultation ahead of time with an experienced bankruptcy law attorney.