Donald Trump and bankruptcy are popular topics that seem to run together lately. Trump has never filed for personal bankruptcy protection but four of his business enterprises have been in bankruptcy, and the news certainly covered it. In a recent editorial article, a journalist stated that Donald Trump is right about bankruptcy, “Namely, he’s right about the attitude, morals and balance of sympathies we should bring to questions of debt and bankruptcy.[i]” Donald Trump is likely a greater success in business because he knows when to cut his losses. There’s no good way to grow when carrying old debt around. Business deals can go wrong and economic disasters happen that would make it impractical to pay off bad debt getting in the way of new income.
People who look down on others who take advantage of bankruptcy are probably jealous.
The people who work hard and earn and protect a perfect credit score are not inherently better people than others, they simply have good finances and no financial trauma. But with the blink of an eye all of that can change. Many dual income earning households would slowly grind to a financial hault if something happened to the earning capacity of one of the spouses in any of our given neighbors. Are they bad people if they have to file for bankruptcy? Should they be shunned for their misfortune?
In the recent GOP presidential debate, Chris Wallace criticized Donald Trump for the four of his businesses that were in bankruptcy, asking, “With that record, why should we trust you to run the nation’s business?[ii]” Trump responded that those were four out of hundreds of deals he has done.
There are similarities between Trump’s business bankruptcies and your option to reorganize your finances in a Chapter 13.
Business bankruptcy, Chapter 11, is different from personal bankruptcy. The goal in a Chapter 11 is to eliminate parts of the business that are no longer working or profitable, for the purpose of otherwise saving the business so it can operate and profit again. In personal bankruptcy, Chapter 13 has a similar feel to it, eliminating some of the bad debt and getting the consumer on a reasonable monthly payment plan, which eventually terminates and the individual moves forward to make money and keep up with their debts, assuming no intervening financial emergency takes place.
There’s no room for guilt and bad feelings in money and personal finances, it’s just business.
Taking the moral and value attitude judgment out of bankruptcy helps people see the laws for what they are, laws designed to bail people out of financial crisis so they can get a fresh start and get back on their feet again. The lenders who lose in bankruptcy expect, as part of their business plan that some borrowers will file for bankruptcy. That is why they charge interest to make income on borrowed money in the first place. Trust that most lenders are making enough money on their other accounts, that your bankruptcy will not shut them down anytime soon.
Joseph Wrobel, Ltd. helps people get control of their finances and a fresh start at financial freedom. The firm’s website contains informative videos about financial issues as well as bankruptcy protection for families who want a fresh start. To keep in touch and read about consumer finance news and stories you can “Like” the firm’s Facebook page and “Follow” Joseph Wrobel. Ltd. on Twitter. If you need immediate legal assistance, please call Joseph Wrobel, Ltd. by calling (312) 781-0996 to talk to an attorney today.
[ii] See HN1 above.