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Chapter 7 bankruptcy for home-based businesses

It appears that many women who operated home-based businesses centered on selling Lularoe products have filed for bankruptcy. At least 24 Chapter 7 bankruptcy cases have been identified where the filer listed Lularoe as the business entity or part of the filer's home-based venture. For those in Tennessee who own and operate a business from home, a sudden change in market or other conditions could prompt a need to seek bankruptcy relief.

Lularoe is a company offering women's clothing and accessories. The company claims they have 80,000 independent retailers who sell its products. For most of the women who sought bankruptcy relief, their financial trajectory declined precipitously from 2015 onward.

Those changes may be due to a saturation of the market as more and more people began to sell Lularoe merchandise. Many of the women who filed enjoyed healthy sales in the years prior to seeking bankruptcy relief. Another concern is the fact that many retailers used savings or credit cards to build up their inventory. That leaves them on the hook for that investment and with a significant amount of unsold articles of clothing.

Starting a home-based business is always risky. However, many Tennessee residents enjoy success through their ventures. Having a strong business plan from the outset is a great way to get off to a good start. That said, market conditions and other matters can make it hard to stay afloat. For those who do experience financial difficulty once their business is up and running, Chapter 7 bankruptcy offers a path back toward financial stability.

Source:, "At Least 24 Women Who Sold Lularoe Who Have Filed For Bankruptcy Since 2016", Stephanie McNeal, Nov. 6, 2017

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