Bankruptcy – Life Goes On!

Every week I sit across from someone who tells me about how guilty they feel about even considering filing for bankruptcy.  They feel guilty because they are unable to repay their debt and they are afraid of what their future will look like.  Fortunately, life does go on, even if you file bankruptcy.

Last week, Readers Digest filed for Chapter 11 bankruptcy protection for the second time in less than four years, saying it needs to cut its debt so it can keep restructuring.  They filed bankruptcy and guess what?  They are still publishing magazines.

Chapter 11 bankruptcy is to companies what a Chapter 13 is to individuals – an opportunity to restructure debt so that debts are prioritized under the U.S. Bankruptcy Code and paid through a court approved plan.  By going into Chapter 11, Reader’s Digest will cut its debt load by 80 percent, leaving it with about $100 million in debt, allowing the company to stay in business and pay its employees and freelancers while restructuring its business.

Reader’s Digest emerged from its first Chapter 11 bankruptcy in 2010, and is still one of the world’s most widely read magazines.  Still think you won’t survive bankruptcy?

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Don’t be embarrassed to talk about debt – find a solution!

People don’t talk about debt, but they should.  I know debt is personal, but with millions of people being unemployed and struggling with foreclosure, debt problems have become common.  Facing a mountain of debt and the possibility of bankruptcy may seem like the end of the world, but believe me, it’s not.  In fact, bankruptcy really is a chance to get a fresh start and take your life back.  I know you feel alone, but chances are someone close to you – a friend, family member or even a co-worker is struggling with their own debt and don’t know where to get help.  It may surprise you to discover that some of those people are also considering filing bankruptcy.

Like most people, you’ve worked hard, paid your taxes, and done your level best to pay your bills on time.  You may have suffered a job loss, facing foreclosure, or simply can no longer afford to pay your debt, bankruptcy can offer you a solution which will let you start over.  I know that the mere thought of bankruptcy makes most people so nervous that they look at it as a last resort.  Many people either ignore the extent of their debt problems or try to resolve it by cashing in hard-earned assets like retirement accounts or draining their savings before talking to a bankruptcy lawyer.  Unfortunately, these temporary fixes rarely solve a lingering debt problem and I find that many people could have turned their situation around much sooner if they had taken the opportunity to find out what their legal rights are.  

Yes, bankruptcy is scary, but so is living in fear of debt.  I don’t pretend that it’s not a huge step to take.  Bankruptcy is not for everyone, but for most people, it is the only way to get out of debt and start fresh.  Once you talk to someone, whether it be a friend who has gone through the process, or a bankruptcy attorney to find out how the process works, you may be surprised to find that the law is on your side.