Bus company files Chapter 7 when liabilities outweigh assets

In Louisiana and other states bankruptcy is a responsible option to achieve debt relief. Every situation is unique and circumstances must be carefully reviewed before a decision can be made regarding whether Chapter 7 or Chapter 13 is the best choice. Each includes various eligibility requirements that must be fulfilled in order to qualify.  

Chapter 7 typically includes liquidation of assets. Chapter 13 is more of a reorganization plan, where the person filing may retain ownership of assets and obtain an alternate payment plan that must be approved by the court. Businesses may also file for Chapter 7 bankruptcy, though they typically use Chapter 11 for debt reorganization.  Most business owners consult with attorneys before choosing their courses of action, which is what one company facing financial difficulty in another state did.

That seems to have been the most viable option for tour bus company in another state. The company provides tours for schools and recently canceled a string of scheduled tours, then announced that it was filing for Chapter 7. The company reportedly has debt obligations to more than 5,000 people. Several of those owed are members of the family who own the company.  

Before filing Chapter 7, the bus company had been in business more than 35 years. Debts apparently include tour deposits, salaries and reimbursements for company expenses covered on personal credit cards. The company’s assets are valued at a little more than $1 million while it reportedly carries nearly $4 million in liabilities. Anyone in Louisiana facing similar financial problems may want to discuss his or her situation with an experienced debt relief attorney. 

Source: cleveland.com, “Discovery Tours files for bankruptcy owing money to 5,600 people“, Patrick O’Donnell, May 8, 2018