One of the biggest misconceptions surrounding personal bankruptcy is that the move represents a mark of failure on the part of the filing party. Bankruptcy is better understood as a tool that can give individuals a chance to reorganize their financial lives. Not only is it not a sign of failure, it is in fact an incredibly savvy financial move, one that many successful individuals have taken advantage of over the years, in Arkansas and across the nation.
In many cases, individuals are faced with bankruptcy after a significant shift in their personal circumstances. Virtually everyone structures their spending around their current level of income. When that income is reduced, whether from the loss of a job or reduced hours, it becomes difficult to meet one’s existing obligations. Over time, a serious financial squeeze sets in, and it is time to seek debt relief.
When considering bankruptcy, most people choose between Chapter 7 and Chapter 13. Chapter 7 usually leads to the elimination of many forms of consumer debt, while Chapter 13 provides a restructuring, where consumers are given a longer period of time to repay existing debts. Both offer consumers a chance to regain their financial footing and move back toward stability.
People from all walks of life have successfully navigated the bankruptcy process. For example, automotive entrepreneur Henry Ford encountered an early business failure and used bankruptcy to restructure and create a new company. Chocolate tycoon Milton Hershey also went through a number of business failures in his early career and was able to leverage a bankruptcy filing into the Hershey Company, which continues to thrive today. For those in Arkansas who are weighing their own debt relief options, it can be helpful to think of bankruptcy as a powerful tool to move past financial strife.
Source: petoskeynews.com, “When should you consider bankruptcy?“, Matt Mikus, July 24, 2015