As a consumer bankruptcy attorney, I am often asked: Why does it seem that in the United States Corporate Bankruptcy is deemed a good business decision and Personal Bankruptcy is deemed to be an Individual failure. My response is simple: ”Nothing can be further from the truth.”
Because I am in this business, I see what is really going on, and I can tell you that all bankruptcy filings are really business decisions and should not be taken lightly. If I were representing a business that was experiencing cash-flow problems, I would have to discuss the problems with the president of the company and the board of directors. The president and the board makes business decisions on behalf of the company. Recently, we saw this play out in the real world when Chrysler and General Motors filed for Chapter 11 bankruptcy protection.
When an individual decides to file for bankruptcy protection, they experience all kinds of emotions. Plus, they are going to be making decisions that will change their lives in some form. Likewise, the decision to file for bankruptcy protection may involve uprooting their family and taking an entirely different path in the future. Let’s face it, this market is scary enough without having to add on all of the additional pressures that the unknown brings with it.
So the decision to file for bankruptcy is the same in reality for businesses and individual. A president and board of directors make a decision that is in the best interests of the company. Likewise, an individual makes the decision based upon what is in their own best interests or the best interests of their family. The only thing different is how we, the public, views the events.
But in reality, the decision to file for bankruptcy needs to be boiled down to one question. If I file bankruptcy, where can I be in five years, and if I don’t file for bankruptcy, where will I be in five years? This question can be altered by changing in the number of years. Sometimes I ask my clients the question at one year, three years, five years and even ten years.
The decision to file bankruptcy is a difficult one, there is no doubt about that, and no-one will ever say it is an easy decision. But, it is not the decision to file bankruptcy that is the toughest part in my opinion. The toughest part is seizing the opportunities in the future.
More on that later.
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