Life After Bankruptcy: A Small Business Owner’s View

20 Sep Life After Bankruptcy: A Small Business Owner’s View

An article on CNNMoney answered “Yes” to the question “Is there life after bankruptcy?” This article is from the perspective of a small business owner who struggled with the decision to file for personal bankruptcy, but was glad that he did. This struggle is one that most people who file for bankruptcy go through. They wonder if they are making the right decision and whether they will recover financially. As this business owner notes, once he shared his experience he was surprised how many other people he knew had also made the decision to file bankruptcy.

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.

FORTUNE Small Business Magazine

By Jeffrey Yarbrough, FSB contributor

September 18 2007: 10:46 AM EDT

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 cafes 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 (, 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.

The trouble came when we opened an outpost of Liberty 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.

– As told to Elaine Pofeldt Top of page

See also: Has Anyone You Know Filed For Bankruptcy?
By Susanne Robicsek on Mar 18, 2007

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Concentrating in Consumer Bankruptcy Law since 1988; Wake Forest Law School JD 1987 Law Office of Susanne M. Robicsek since 1993, Law Clerk to Judge Rufus Reynolds, US Bankruptcy Judge for Middle District of NC; Burns Price & Arneke, PA, David Badger and Associates, PA.

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