Many California businesses, especially those in the entertainment industry, have certainly felt the effects of the economic downturn. As a result of many Americans choosing to spend their money mainly on necessities and cutting back on entertainment over the past few years, many profitable and successful businesses have struggled.

As more consumers in the U.S. are finally feeling comfortable with spending a little more money each month on entertainment, some business owners may be hoping for the best that their companies will turnaround in the coming years. However, other business owners may not be able to take this risk, and they may realize that it is now time to consider filing for business bankruptcy protection before their financial situations get worse.

Last week, the management group that runs Irwindale Speedway filed for Chapter 7 bankruptcy in California. The group announced that the 2012 racing season at the track is canceled and offered little explanation for the bankruptcy filing. However, the track did lose Toyota as a sponsor in December and attendance at race events have been dwindling.

According to the bankruptcy filing from last week, Irwindale Speedway owes creditors more than $330,000. The bulk of the track's debt stems from personal injury claims that were filed against the company. One of the claims is for $150,000. Irwindale Speedway also owes $55,000 in rent to the company that owns the property where the track is built on. Other creditors include the city of Irwindale Police Department, Golden State Water Company and the San Gabriel Valley Tribune.

When San Diego businesses and other firms in California are challenged by these tough economic times, business bankruptcy may be a viable solution to a company's financial problems. Bankruptcy certainly may help business owners settle their debts, but it can also offer business owners a new sense of relief that they may not have felt in years.

Source: ESPN LA, "Irwindale group files for bankruptcy," Tim Haddock, Feb. 14, 2012