An organization dedicated to providing mental health services predominantly to those suffering from substance addiction has filed for bankruptcy protection, according to local business sources. The center, which closed its doors officially in 2011, has filed for Chapter 7 bankruptcy after a protracted attempt to satisfy outstanding bills. Michigan residents are keenly aware of how difficult it can be to pay down creditors, which is what makes Chapter 7 such a valuable tool.
Bankruptcy paperwork confirms the company's assets to hover somewhere shy of $30,000 with debts of over $200,000. The primary creditors are employees awaiting payment, but the company also owes money to a bank and other interests. Company representatives filed for bankruptcy in April of this year. However, the company closed its doors some time ago.
The company operated from 2006 to 2011 but ceased providing services to clients by 2010. The center worked mostly with those fighting addiction, as well as providing support to their family members. Between 2010 and 2011, the organization transferred care of their patients to nearby medical centers as preparations were made to close down the center. The case is currently being overseen in bankruptcy court.
Michigan residents have seen first hand how debt can cripple a company, regardless of the field of services it provides. Options like Chapter 7 bankruptcy allow owners and shareholders to liquidate company assets in order to satisfy outstanding debts, rather than taking the financial responsibility of those debts upon themselves. This can allow them to reenter the market with their personal finances intact and free of outstanding debt.
Source: bizjournals.com, "Mental health nonprofit, in bankruptcy, owes DHHS $2 million", Dawn Kurry, April 28, 2014