Bankruptcy

The Only Thing Certain is Change

By Jonathan

No one starts his or her adult life expecting to file for bankruptcy.  Yet every week, I meet with men and women in their 30's, 40's, 50's, 60's and older who have become insolvent and need relief under the United States Bankruptcy Code.   I often hear the lament "I never in a million years thought I'd be sitting in a bankruptcy lawyer's office."  I usually respond by reassuring my clients that bankruptcy is a legitimate and legal financial tool that can offer hardworking families a kind of "do over" when unexpected circumstances finances to go south.

If this sounds familiar to you and you are struggling with the idea of finding anything positive from your bankruptcy experience, I would encourage you to take a few minutes to think about how and why you ended up in a bankruptcy lawyer's office.  I would also encourage you to consider what you can do differently in the future to make your bankruptcy a one time event.

I also think it is important to recognize that you are by no means alone in facing unsettled financial times.  You may have seen lists containing the names of famous historical figures who filed bankruptcy (like Walt Disney, Larry King, even Wolfgang Mozart).   Now think about the tremendous change that we are all experiencing now.  I recently ran across a blog called 24/7 Wall Street that issues a yearly list of companies or brands it expects to disappear in the next year.  This year's list includes:

• Readers Digest magazine
• Blockbuster Video Stores
• T-Mobile cell phone carrier
• Merrill Lynch stockbrokers
• Radio Shack
• Zales Jewelers
• Kia Motors

Now, I fully expect some of these brands to survive, but I am also certain that one or more may go away. 

Other well known brands that 24/7 says are in trouble include:

• Newsweek
• Eastman Kodak
• Motorola
• Palm (smartphones)
• E*Trade (discount stock brokers)

I am sure that you have heard of many of these companies, and if you think back, most of these businesses were thriving, dominant concerns run by experienced executives from the finest business schools.

The point here is that anyone, and I mean anyone, can get into financial trouble quickly.  Just the other week, for example, I met with two men about bankruptcy, each of whom formerly earned over $1 million annually.

Bankruptcy is certainly not a good thing to experience but in our economic system, a bad decision or two and an unexpected change in the business environment (think about those shrimpers in Louisiana) and there you will be – sitting in a bankruptcy lawyer's office.

Full post as published by The BK Blawg on June 20, 2010 (boomark / email).