Bankruptcy Indiana

In the world of bankruptcy, jobs play a huge role, and, in the 25 years I’ve been a debt consolidation lawyer offering bankruptcy services in Indiana, I’ve seen jobs destroyed by the “ripple effect”.  Big companies get into financial difficulty and lay off workers.  Then workers haven’t the money to support small businesses, and those lay off more workers. That’s exactly what happened this month when restaurant chain Friendly’s ice Cream filed bankruptcy and laid off 1,260 workers with essentially no warning.

As a lawyer who’s helped hundreds of business owners file small business bankruptcy in Indiana, the story about Friendly’s is in itself not surprising to me. In fact, in these Bankruptcy in Indiana articles, I’ve shared the stories of quite a number of companies that simply couldn’t stay solvent in our struggling economy.  However, as one of my Columbus  small business bankruptcy lawyer colleagues pointed out, there are three aspects in the Friendly’s story worth explaining to my readers:

• The company filed Chapter 11 bankruptcy, and won the approval of the bankruptcy court to not only remain open (Friendly’s closed 63 of its stores, but 424 stores remain) while it pursues a sale, but won permission to borrow more money to help fund operations in the meanwhile.
  
• It’s interesting that one day earlier, another restaurant chain, Real Mex Restaurants, won the same type of approval to borrow money to fund operations while in bankruptcy.
  
• Federal law prohibits companies from laying off 50 or more workers at one time without prior warning.  However, the law applies only if those workers are all in one location.  (The idea is to avoid devastating small communities when many workers who live there are suddenly without jobs.)  Friendly’s workers were spread out in different locations across the country.

Unfortunately I, along with all the good bankruptcy attorneys in Indiana who work in the Zuckerberg bankruptcy law offices, function in the small towns scattered all through central and southern Indiana. And, as sure as my name is Mark Zuckerberg, it doesn’t take laying off fifty people to cause devastation in those small towns!

Can people who’ve lost their income be helped by filing bankruptcy in Indiana? Yes, but emerging from bankruptcy becomes the challenge, because to make a successful financial comeback, it takes income from jobs. That's true whether the money is needed for student loan debt help, or simply to pay everyday bills!

That’s true even when an individual files bankruptcy Chapter 7 in Indiana. It’s especially true when a debtor files for a 3-5 year debt repayment plan under Chapter 13 bankruptcy law in Indiana.  Income from jobs is the key.  I always urge readers and clients:  If your job situation is beginning to feel “iffy” because of an employer’s financial difficulties, don’t wait until the announcement of a layoff is made.  Discussing your situation with a legal professional and know your options. 

I can’t promise you won’t get caught in the “ripple”, but I can promise you this:  Things are easier when you’re prepared!