When many people in California think about bankruptcy, they likely do so in a negative light. Some feel that the only reason to file for Chapter 7 bankruptcy is due to a lack of financial discipline. Others assume that bankruptcy represents some type of failure. Some even believe that bankruptcy is nothing more than an effort to shirk one's financial obligations. In reality, however, many highly successful people turn to personal bankruptcy to resolve complex financial matters.
An example is found in a successful chef and restaurateur who recently filed for Chapter 7 bankruptcy. He owns multiple restaurants on the East Coast, including the well-known steakhouse Palladino's, which closed unexpectedly earlier this year. The landlord of the building in which the restaurant is housed reportedly sued the chef for unpaid rent in the amount of $25,000. Other financial troubles arose in the same period of time.
In his bankruptcy filing, the chef claims that he holds assets valued between $50,000 and $100,000. The number of creditors are listed in the range of 100 to 199. Those creditors include various revitalization and business assistance organizations.
While the outcome of this Chapter 7 bankruptcy filing is not yet known, the case serves as a powerful reminder of the fact that anyone can find themselves in need of bankruptcy protection. In this case, a successful chef and restaurateur is seeking assistance with overwhelming debt and liabilities. However, that does not preclude him from going on to reach new levels of success in future endeavors. Many California residents could benefit from redefining their beliefs about the consumer bankruptcy process.
Source: bizjournals.com, "Phila. Chef Luke Palladino files for Chapter 7 bankruptcy", Kenneth Hilario and Alison Burdo, Sept. 9, 2016