Federal restrictions prompts Chapter 7 filing | The Colpitts Law Firm
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Bankruptcy May Be Your Option

Federal restrictions prompts Chapter 7 filing

There are a variety of different factors that can impact the overall success of a company in Oklahoma, and some of them could be beyond the control of the company's decision makers. For example, some businesses may struggle as a result of market conditions or weather. For others, new government regulations can create complications. This appears to be what happened to one for-profit educational company, prompting it to seek Chapter 7 bankruptcy protection after a major source of its revenue was cut off.

For-profit educational companies such as ITT have undergone increased scrutiny from the Department of Education and state regulators as they attempt to enforce more rules. Officials accuse the company of exaggerating the quality of its programs and misleading students about their potential employability after they complete programs at the institute. As a result, the federal government issued new regulations, prohibiting the company from enrolling new students who are receiving federal aid.

Following the August announcement, ITT closed 130 schools across the country, impacting thousands of students and employees. Recently, the company announced that it was seeking Chapter 7 bankruptcy protection. In court filings, it listed between $100 to $500 million in both assets and liabilities.

Employees of many companies in Oklahoma put in long hours attempting to ensure the success of a business. Despite their best efforts, some businesses continue to struggle to be viable. As a result, many began to examine their options in regards to debt management and relief. Fortunately, an attorney with experience with Chapter 7 bankruptcy can help these companies decide if following the same path as ITT is the right choice for them.

Source: The New York Times, "ITT Educational Services Files for Bankruptcy After Aid Crackdown", Sept. 17, 2016

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