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SportsQuest owner bankrupt

The creator of a sports megaplex in Chesterfield County, near Washington, D.C., has filed for Chapter 7 bankruptcy. The man, whose personal bankruptcy petition was filed in area courts in late April, lists more than $2 million in financial liabilities while claiming a meager $579,000 in assets.

Reports show that the vast majority of the man's debt is tied to the failed sporting complex, known as SportsQuest. One of the largest debts, $621,000, is owed to the owner of the property that was leased to the entrepreneur. Another massive debt of $821,000 to CIT bank was personally guaranteed by the SportsQuest founder; that is, he took out the loan for the business and guaranteed it with his personal assets. An additional $40,000 is listed in credit card debt.

In addition to the man's personal bankruptcy, his company, SportsQuest LLC, filed for Chapter 7 bankruptcy in summer 2012. The company had accrued millions in debt, holding an incredibly small amount of assets attributable to office supplies and furniture. The future of the sports complex remains unknown as plots of the property have been foreclosed upon by the turf company that lent the highest percentage of money to the operation.

Chapter 7 bankruptcy occurs when a person's debts far outweigh their assets. Applicants must pass a "means test," which requires them to prove that they are unable to pay their debts because of their meager holdings. This is markedly different from a Chapter 13 bankruptcy, in which filers are permitted to restructure their payments in order to partially fulfill their debts. Chapter 7, also known as liquidation bankruptcy, involves the sale of major assets to pay off loans. If you have questions about your bankruptcy, consider consulting a qualified bankruptcy attorney. These professionals can help you understand your rights and responsibilities throughout the filing process.

Source:  richmondbizsense.com, "SportsQuest founder files for bankruptcy" Michael Schwartz, May. 01, 2013

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