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TireMax files for Chapter 7 bankruptcy in Texas

When a business has stopped paying one of its creditors the money it owes, it could quickly turn into a serious financial problem. The creditor typically will do everything within its power to obtain the money that is owed. This could mean constant telephone calls or even a visit at the front door or even a lawsuit for breach of contract. This is what had happened to a Texas tire retail chain that has recently filed for Chapter 7 bankruptcy.

The company that filed for bankruptcy is TireMax, which was based in Texas and had hopes of one day having 100 stores in 28 states by 2011. The company was even listed in Inc. Magazine's '5000 List' of quickest growing companies in 2010. Unfortunately, the business didn't quite live up to its dreams and had only opened 15 company stores by the time the business filed for bankruptcy liquidation.

The business reported $4.12 million of debt owed to creditors, while listing a total of negative $1.41 million in assets. Some of the creditors listed included, USA Wheel & Tire Service, Snap-On Credit, Bridgestone Americas and American Tire Distributors Holdings Inc. The company's vice president reportedly earned about $727,000 per month beginning in 2010 until the filing of the bankruptcy petition. The vice president's husband is the president of TireMax.

Although giving up on a business can be difficult for an entrepreneur, it is also a viable option for some businesses who are struggling to make ends meet. Filing a Chapter 7 bankruptcy typically allows a business to discharge certain debts in order to obtain debt relief. However, the company will also have to liquidate all of its assets in order to repay creditors. Nevertheless, those individuals and businesses seeking to finally confront longstanding financial obligations that have become unmanageable may gain by understanding their rights under the federal Bankruptcy Code.

Source: TireBusiness.com, "Maxxed out: TireMax chain goes bankrupt amid charges," Jeff Yip, Nov. 5, 2012

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