I recently read a very interesting article in USA Today. The article’s main point is that for large businesses, a Chapter 11 bankruptcy is a useful and often successful business strategy. Think Hostess, American Airlines, and now most recently Eastman Kodak. However, for smaller businesses, bankruptcy is more difficult.

My response is that bankruptcy and other laws do exist for the benefit of all, and do work. They just work differently. Careful review and consideration of the costs and benefits is needed. For large businesses, the costs can be spread over a much larger base, and the size makes post-bankruptcy financing more attractive.

If you are a small New Jersey business in financial trouble, please visit this area of our website for resources and articles and feel free to contact us at 856.596.2828.

A major factor of how so many of us got into a financial crisis, I believe, is our tendency to compare ourselves to those around us. I recently read an article in the New York Times showing that  our perception of reward and danger is shaped by what we expect of ourselves and the world.

We tend to measure our social and personal standing in the community by what the people around us are doing, saying or thinking. When everyone was spending money on new cars, new houses, and other trappings of success, that raised the bar for those of us who measured ourselves against others. It did not matter that those people were running up mortgage or credit card debt to spend beyond their means. We had to do as well….

This of course creates a self-fulfilling feedback loop. We spend and buy because others are doing so. More money goes around, and the expanding money flow creates jobs and apparent well-being. But if the spending is fueled by increasing debt, as it was until 2008, the appearance is an illusion that sooner or later has to come to an end.

The problem was (and still is in my view) that so few people learned to manage their expectations. So few individuals know how to do simple financial planning or care to keep a basic budget, to see what they could afford. Even today, so few people I see and so few business owners I counsel can really tell me what they have to spend to survive. We suffer from a studied blindness to simple personal finance. That has gotten many into trouble and until that changes, the root problem remains.

The key to managing expectations is found in the article I read — hope for the best, but plan for the worst. Maintain a positive outlook, but one tempered by and grounded in objective facts. Make decisions based on an objective non-emotional assessment of the present, but with a positive outlook. Be grounded in the real numbers that a budget, or cash flow projection shows. Actively market and sell to new customers. Look for new opportunities. Remember that the past is not prologue to the future and every day is a new day. Above all, remember that things go in cycles.

We help people and businesses every day to get relief from debt, and to take back control of their business and personal financial lives. For more information, please visit all areas of our website and feel free to contact us at any time.

The end of year holidays can be especially difficult for people and families in distress, but we now are facing a New Year, a time to reflect on what we have and what we value, and how to positively move forward with that.in the context of what is hopefully a long life. I meet and try to help a lot of people whose financial lives or businesses are out of control or falling apart, and the most important job I have is to help them put things in perspective, so they can take control of their lives. Here are some thoughts from experience I’ve gained in helping people whose financial and/or business lives are spiraling out of control:

1. Life is a long road, and the bumps in the road become less important once we get over them.  Don’t dwell on the past, on how much better things were or how you never thought you would end up in financial uncertainty. Accept that there may be costs and difficulties ahead but facing them usually leads to calm and reasoned actions.

2. Our first obligation is to our family, and to preserving our ability to support them.  Don’t worry about the loss of a good credit score, or what people will think, if you lose a house you can no longer afford. Our first duty is not to our creditors, but to support and maintain our families and those important to us and if this means that we have to shed financial obligations that threaten our ability to keep our jobs or to put food on the table, then so be it.

3. Enjoy and revel in the things that money cannot buy. Family, friends, shared experiences.

4. Have faith that no matter what happens, “this too shall pass”.  Many years ago, someone told me it is not the number of times you fall down that counts, but the number of times you get up. All my clients eventually find a way to get on with their lives.

I hope these pointers help you to overcome the many fears you may be experiencing.  Please browse this website for resources and full information on bankruptcy and bankruptcy alternatives.