Traditionally taboo
I remember a time when bankruptcy was taboo. You were frowned upon when you filed for bankruptcy. It was embarrassing, degrading and shameful to be bankrupt. It was a symbol of failure and weakness. When you were bankrupt, you had struck out on life.
In fact, one firm that believes in debt settlements rather than bankruptcy, says that bankruptcy is among the top five negative, life-altering events, right up there with divorce, severe illness, disability, and loss of a loved one. Heavy? Yes, but probably overblown.
Standing room only
How times have changed. Bankruptcy courts are now standing room only. Lawyers have more cases than they can handle. Some folks in need of the financial relief that bankruptcy offers are being turned away by attorneys who fear being overwhelmed by their surplus of cases. Bankruptcy judges are overworked and over-fatigued. The downturn in the economy has forced people to rethink what filing for bankruptcy means.
Bankruptcy has become the thing to do to survive and to again thrive. It has changed the way we look at ourselves and how we judge others. A bankrupt person is no longer regarded as a failure or a deadbeat. A bankrupt person has become a sort of champion in this economic war that is raging across the nation and around the globe. Bankruptcy has become the smart thing to do when overburdened by debts and other liabilities. Bankruptcy has become chic, trendy, in style, cool.
Leveling off, but...
“Consumer bankruptcies continue to decline over the past year as households deleverage and consumer credit remains tight,” said American Bankruptcy Institute (ABI) Executive Director Samuel J. Gerdano. “As a result, total consumer filings will be lower in 2011 than the 1.5 million consumer cases in 2010.”
Although bankruptcy filing numbers are still large, they have declined in 2011and seem to be leveling off, mainly because credit is not as freely available as it was before 2008. Naturally, without access to credit, the less chance an individual or company risks bankruptcy. But filings are breaking records since the bust that befell us all in 2008.
And the list goes on...
Tens of thousands of bankruptcies are filed each year in the US. If – after carefully considering your financial situation – you decide bankruptcy is the way for you to get financial order back into your life, you won’t be alone. Famous people, starting with Donald Trump, are now or have filed for nankruptcy. These individuals would probably have preferred not to be in such a position, but they saw the financial relief it afforded and signed on:
• PT Barnum, circus promoter
• Toni Braxton, entertainer
• Henry Ford, automobile magnate
• MC Hammer, rap singer
• Milton Hershey, chocolate magnate
• Michael Jackson, entertainer
• Thomas Jefferson, patriot, president
• Willie Nelson, country singer
• Rembrandt, painter
• Debbie Reynolds, actress
• And the list goes on...
The big boys, too
Major corporations that we thought were invincible, like Borders, declared for bankruptcy. No, even the big boys are not exempt. They too have folded and put their cards on the table:
• Converse
• Delta Air
• Enron
• Kmart
• Pacific Gas & Electric
• Paramount Studios
• Texaco, Inc.
• Trump Hotels & Casino Resorts Inc.
• United Air
• Western Union Corporation
• And the list goes on...
The notorious case of Solyndra comes to mind. This bankruptcy case reached all the way to the White House. Solyndra’s collapse has prompted congressional scrutiny of President Obama, who praised the solar panel-maker during a May 2010 tour of its facilities. The Obama administration issued final approval of the loan that also won support from officials in the administration of George W. Bush. The company, based in Fremont, California, faces a probe by the Federal Bureau of Investigation and Republicans in Congress over a $535 million federal loan guarantee it used to build a $733 million factory. Don’t worry, your finances won’t call for Congressional scrutiny, and bankruptcy could bring you relief, not grief.
And these companies, according to ABI, are on the verge of bankruptcy:
• Rite Aid
• Six Flags
• Harrah’s Entertainment
• Pioneer Electronics
• Blockbuster
• General Motors
• And the list goes on...
Changing times
While there are certain disadvantages one must consider when filing for bankruptcy, such as possibly losing your financial freedom because the trustee will be looking over your shoulder. You will have to live without credit cards for awhile. Your finances will always be scrutinized. But the benefits may be too good to pass up.
Bankruptcy offers peace of mind from abusive creditors and imminent collection lawsuits. In many cases your debts would be wiped away. There will be opportunity to save your house from foreclosure in a bankruptcy case. You may get to keep your car. You may also be able to get rid of your second mortgage. You’ll clear the slate and get a fresh start.
The seventies brought us disco. The anti-nuclear movement was heard in the eighties. Some say that the nineties was a time of extravagance and excess. Many owned more than one home and several cars. We lived on credit. The past decades were rather loose financially and now may be payback time. This may also be the time to file for bankruptcy. It’s cool. Check it out.
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Lazaro Law Group, Professional Corporation represents immigrants all over the United States and the US Embassy in Manila. The firm’s offices are located in San Francisco, Fremont/Newark/Union City, and Sacramento, California. Attorney Johnson Lazaro can be reached at (415) 800-5775 or toll free at (855) 4-LAZARO. His email is This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
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This article should not be taken as legal advice for any individual case or situation. The information is intended to be general and should not be relied upon for any specific situation. This is not meant to create a lawyer-client relationship.
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