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Saturday, October 17, 2009

The Business of Bankruptcy

There are hundreds of thousands of people in pursuit of the American dream while others are just barely making a living, heading to a dead end job to make gas money to get back to work the next day.

The business climate is stretched in a dismal reality that makes talk of vision and success seems like foreign words, yet there are those that remain positive and upbeat.

A couple of weeks ago I heard Donald Trump speak about a topic that people I know avoid like the plague, bankruptcy.

Coupled with the words “excellent tool” Trump explained bankruptcy as something many of his wealthy friends as well as himself have used to restructure themselves.

Along with his books on wealth, famed TV show, and casinos which have yielded both success and failure, Trump sees bankruptcy as nothing more than a beneficial legal mechanism.

“There is no shame in bankruptcy,” Trump says, "It doesn't matter - it's a modern-day thing, a legal mechanism."

However, acceptable Trump projects it, somewhere along the line my impression of bankruptcy has been engrained as a sign of failure for which you work day and night to avoid.

Yet with all of its preconceived shame by association, I am finding more and more people and companies (on a daily basis) who have quietly filed for either Chapter 7 or Chapter 13 bankruptcy (the most common) and emerged somewhat of a success.
Most cite their desire to stop foreclosures, eliminate credit card debt, tax debt, and medical bills while keeping their homes, cars, and other properties.

Last week the federal government launched yet another attempt to address bankruptcy law. The House Judiciary Committee’s Subcommittee on Commercial and Administrative Law held a hearing on the collapse of Circuit City and how recent changes to the Bankruptcy Code may be hurting the ability of companies and individuals to restructure under court protection.

The goal is to shift the advantage back to the debtors.

With the local business climate the way it has been and Indiana’s recent position regarding unemployed constituents, more and more companies and individuals may be filing for bankruptcy.

In the last quarter of last year 14,513 individuals filed in the state of Indiana joining the nearly 300,000 filings nationally for the same time frame.

Thirty years ago people still had a flicker of hope in realizing a dream. Americans fought to succeed and were resilient in doing so. Bankruptcy filings existed, but it was the final option to restructure not to throw in the towel and quit.

The laws have changed to protect the system from abuse. If this becomes your option be careful to consult an attorney or do plenty of research to become knowledgeable of your rights.

A tool is only as good as the person using it and their understanding of how it works to solve the existing problem.

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