At least 24 women who currently or formerly sold clothing through Lularoe have filed for bankruptcy in the past two years, and many of them have seen income from their "small business" decline dramatically in recent months.
The personal bankruptcy filings — all from January 2016 to October — came up during a search of court records because the women or couples said they were "doing business as" Lularoe, or "LuLa Roe."
Pamela Foohey, an associate professor at the Indiana University Maurer School of Law who is an expert in bankruptcy law, reviewed nine of the cases for BuzzFeed News.
"The thing that really stood up to me the most, was individually and taking all the nine cases I looked at in conjunction, was the steep dropoff in income from the Lularoe business over the years," she said.
Additionally, although BuzzFeed News found 24 bankruptcy cases where Lularoe was listed as a business alias in court records, Foohey said she would guess that number is probably substantially higher.
"I would guess there are a lot more cases in which Lularoe businesses impacted a consumer bankruptcy case," Foohey said.
She said this is because not everyone will list their business alias on a personal bankruptcy filing. Four of the parties filed for Chapter 13, while the rest filed for Chapter 7.
A spokesperson for Lularoe told BuzzFeed News they did not have comment on the bankruptcy cases.
"It would be inappropriate to comment when we have no information regarding the personal circumstances under which an individual may have decided to file a petition in bankruptcy," the spokesperson said. "We work very hard to support the 80,000 independent fashion retailers who sell Lularoe product and hope they all meet the goals they have set for themselves.”
Foohey said she noticed on average that the families reported a "quick downward fall" in income from their business from around 2015 to when they filed.
Another case, A.B., who filed for bankruptcy with her husband in Washington state in June.
Foohey said in her professional opinion, the cases she reviewed were pretty typical of most Chapter 7 cases in terms of the debt and assets listed.
Stephanie McNeal is a social news editor for BuzzFeed News and is based in New York.
Contact Stephanie McNeal at email@example.com.
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