Life after bankruptcy
A small business owner gives in and files for Chapter 13 - and discovers it was the smartest decision he's ever made.
(FSB Magazine) Dallas -- I had a bad feeling in the pit of my stomach when my lawyer asked me to come to his office with my wife, Tara. I had been struggling to pay $1.3 million in debt from a failed restaurant in Houston. I had hired the attorney after creditors started phoning our house and making violent-sounding threats - and sending their goons to my other cafés to collect. Tara was home all day with our 3-year-old triplets, and some of the collectors were so menacing that we were afraid to answer the door.
When I hired the lawyer, I'd told him that bankruptcy wasn't an option. He'd gone along with me. But when we arrived at his stately Dallas office, he told me - slapping a thick pile of unpaid bills from my creditors on his desk - that he had changed his mind. My bank and former suppliers wanted payment - immediately. I had already taken out a second mortgage on my house, and my new venture, Big Ink PR & Marketing (biginkpr.com), was pulling in only $1,000 a month. "You can give the money to your creditors," the lawyer said, "or you can buy groceries." He told us I should file for personal bankruptcy. Tara's eyes welled.
I had never imagined this moment when I left my job selling ads for a national fashion magazine to buy my first nightclub, Clearview, in Dallas. From the time I picked plums from my grandmother's trees and sold them to the neighbors, I have always been good at spotting opportunity. Clearview became so successful that I turned it into four clubs under one roof and later opened a second venue next door. I also opened a thriving restaurant called Liberty Noodle in Dallas. At its peak my company employed 200 people and generated $6 million annually.
Noodle in Houston. Only after we had signed the lease did we learn that the city was going to start construction on a light-rail track in front of the building. (We resolved a dispute related to this in mediation.) Locked into the deal, we tried to make a go of it. Then, on opening day, Tara went into labor with our triplets two months early. The babies were hospitalized for more than a month. The Houston manager put up a good fight, but we couldn't overcome our inaccessible front door. We shut down. I had already sold the nightclubs, our stocks, our motorcycles, and a boat to pay my team. Still, I couldn't keep up with my creditors.
I thought bankruptcy was a coward's way out, an escape hatch for crooks and cheaters. So I soldiered on, trying to pay the seven-figure debt. It wasn't until the day the lawyer confronted us that I realized I had put concern about my reputation above being a responsible husband and father. We applied for Chapter 13 protection in 2005, before Congress made it harder to file. Now my secret was public.
Filing was the smartest thing I ever did. A judge dismissed some bills and let me consolidate others into one monthly payment. I'm now paying off a five-figure debt that includes back taxes and attorney fees, using any profits I generate at my growing firm, Big Ink. Meanwhile, I have created jobs for a dozen employees. Since I opted for Chapter 13, I have shared my story with other business owners - and been surprised to learn how many have also filed, bounced back from crushing debt, and created successful new ventures. I only wish I had known sooner.click here.