Many small business owners and consumers throughout California have probably had to make some modifications to their personal budgets and business plans over the past few years in order to adjust to the challenging financial and economic times our country has faced.
But as the recent bankruptcy filing of one San Diego business has shown, even business owners and consumers who make careful financial decisions cannot always prevent bad things from happening to them that could completely damage their seemingly stable financial situations.
According to The Wall Street Journal, a national medical records firm learned that one of its offices in San Diego had been broken into on New Year’s Eve. The burglary caused the firm to lose the important electronic data and information of about 14,000 patients. This loss of information has certainly caused many patients to worry about having their identities stolen, but it has also forced the company to file for Chapter 7 bankruptcy protection due to the costs and threats of lawsuits resulting from the data breach earlier this year.
The Wall Street Journal reported that the San Diego-based medical records company filed for bankruptcy protection last week. The firm listed about $226,000 in assets and more than $580,000 in liabilities. By filing Chapter 7, the company will liquidate its assets in order to pay off some of its liabilities. Because the company’s liabilities are reported to be more than the company’s assets, the company may be considered insolvent according to most debt settlement lawyers.
The company did take appropriate actions to report the data breach. However, the repercussions of the incident resulted in costly damages that the company believes it will not be able to recover from.

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