Modesto Budgetel Inn Files for Bankruptcy

Budgetel Inn in Modesto California filed for Chapter 7 bankruptcy this past week. United Resorts LLC operates the nearly 100 room Budgetel Inn and hopes to liquidate its assets to pay off the motels debts. According to the court documents filed, United Resorts debt includes $61,439 in lease payments, $99,534 to California Department of Industrial Relations and $160,000 that United Resorts CEO and President loaned the motel for renovations, capital improvements, and other expenses.

One day after filing bankruptcy, tenants were informed that the motel was closing and they were to vacate the premises by that afternoon. This short notice came as a surprise to many, as most were waiting on refunds for rent that they already paid. Approximately half the people that stayed at the Budgetel Inn stay as long-term guests consisting mainly of homeless and low-income families. The motel has since ceased business activities, and the main office doors are padlocked shut.

Unfortunately, businesses that fail to pursue debt relief efforts early enough in their financial struggle may succumb to the results of their delay. While the motel could have restructured their debts in a Chapter 11 “reorganization bankruptcy”, they fell short leaving them with minimal options. Now in an attempt to resolve their financial liabilities, the motel will pursue a Chapter 7 “liquidation bankruptcy”. Here, a court-appointed trustee will sell off the debtor’s assets and distribute the funds to creditors and agencies the debtor owes money too.

For those left out in the cold, there are local agencies that can help. St. Vincent De Paul Ministry has arranged temporary lodging at other Modesto motels for 57 people including families with children, disabled adults, and senior citizens. The single tenants were advised to go to Beard Brook Park where the city allowed the homeless to set up a tent city. Social service workers also arrived at the Budgetel to provide assistance to the tenants.

If you find yourself in the circumstances beyond your control and you are struggling to pay your debt, don’t wait! There are many options to help you get out of debt and back on the path to financial freedom. Contact a Sacramento bankruptcy attorney to find out what choices you may have to get debt relief.