The financial success of Maryland businesses can depend on many factors. However, when economic strife hits the United States, some plunge into serious debt and cannot recover.
One Bethesda children’s store that offered day camps and preschools for young children recently experienced this issue and filed for Chapter 7 bankruptcy as it saw the closure of its Maryland location.
Store permanently closed
Bethesda Magazine reports that the chain has a variety of debtors and that it can no longer afford to operate in light of the current pandemic affecting the nation. This particular location is closing after more than 15 years in operation and recently filed for Chapter 7 bankruptcy, which will reconcile the company’s debts by selling off any assets. This differs from Chapter 13 protection, which helps individuals and companies reorganize their debt and create payment plans to pay off what they owe.
Store’s debts vary
One of the co-founders of the children’s chain revealed that the economic crisis and the nature of the pandemic have kept its stores closed since March, which only made the issue graver. There are almost 40 claimants in the bankruptcy, many of whom are owed relatively small amounts of money. However, since the store’s assets are presently limited, it is unclear when the debtors will receive any payments. The Chapter 7 bankruptcy, as well as the payments, are now held in trust.
The case’s debtors are currently waiting for further information on the bankruptcy proceedings, which are expected to continue throughout the coming months. While a chapter 7 bankruptcy typically resolves debt issues more quickly than Chapter 13, it is unknown whether the store’s assets will cover all debt owed.