Friday, March 3, 2017
Behind The Brain Store’s Need To File Bankruptcy
When the economy tanks, it is not just individuals who suffer. Many businesses, both large and small, take a hit. And when that happens, businesses are just as likely to seek solace in the form of bankruptcy. Some of the more well-known business bankruptcies over the years include Kodak, Enron, General Motors, Blockbuster Video, Schwinn Bicycle, and Lehman Brothers. The reason or reasons these companies needed to file bankruptcy vary, but many hinge on consumer spending. When consumers have less to spend, companies also suffer. The effect can be a cycle of bad debt, because when companies have to close their doors they also have to let go of their work force. When a large number of people suddenly find themselves out of work it is hard enough to pay the mortgage, let alone buy a new car or bike. The latest casualty in business bankruptcy is Chicago based retailer The Brain Store.
The Brain Store had to file for bankruptcy for the following reasons:
• Lower than expected sales during the holidays, which is usually the time of year mots companies see their profits go from “in the red” to “in the black” (which is why the day after Thanksgiving is referred to as “Black Friday).
• Sluggish sales led to a severe cash flow problem, and from there the company’s bottom line never recovered.
With less working capital on hand, The Brain Store fell behind on rent payments at its retail locations and decided to look to the bankruptcy court for relief. This might sound familiar in your own life, where an unexpected event leads to a loss of income, making it hard to pay your bills. If you have experienced a sudden downturn in the amount of money you bring home every month and are struggling to pay the mortgage, car payments, and other bills, you too might consider filing for bankruptcy. Bankruptcy will wipe out or reduce a lot of your debt, making it possible to pay for the things you need to keep while not having to pay for the debt that is dragging you down. You should also think about trying to modify your mortgage, so that the payments are more in line with what you can make each month. Either option will free up some of your money each pay day, and give you a little room to breathe. For more information on bankruptcy or mortgage loan modifications, call us today.
For more information about bankruptcy, contact us at www.law-ri.com. We will help by coming up with solutions that work for you and have multiple locations to meet your needs for office visits.