Increase in Personal Bankruptcy Filings among LuLaRoe Consultants Spark Speculation

November 10, 2017 Posted by kingcade

A number of women who currently or formerly sold clothing through LuLaRoe have seen income from their “small businesses” decline dramatically in recent months, forcing some of the women to file for bankruptcy.

The personal bankruptcy filings- from January 2016 to October 2017- came up during a search of court records because the women or couples filing said they were “doing business” as Lularoe or LuLa Roe.”  At least 24 have been identified, but it is estimated the number is much higher.

Experts noticed on average that the families reported a “quick downward fall” in income from their business from around 2015 to when they filed.  For example, one woman, a single mom in California reported she made $61,330 in 2016 from “operating a business,” which is presumed to be her LuLaRoe business since it is the only one she says she owns.

But from January to July 2017, she had only made $10,547.42 from her business, less than half she had made midway through the year before. She reported her average net income in 2017 from her business was $184.39 a month.

She was spending just as much in some months, if not more, on “operating expenses” for her business as she was making, according to the filing.  For example, in May 2017 she earned $1,796.12, but spent $2,666.13 to keep her business afloat.

She lists $28,991 in assets and $8,000 worth of “inventory.”  Her $85,253.43 in debts include thousands of dollars on multiple credit cards and almost $1,000 owed to her Paypal merchant account.  She filed for bankruptcy in July of 2017.

Some of the other women identified, listed unpaid unsecured business loans, which shows a “clearer tie to the LuLaRoe” business.”

The co-founders of LuLaRoe appeared on CBS This Morning to speak out against the recent allegations the company is facing about merchandise quality and refund policy complaints.  A $1 billion lawsuit was filed on October 23 by two former consultants on behalf of all LuLaRoe consultants alleging the company is operating a pyramid scheme.

If you have any questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at

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