Bankruptcy Is Not a Failure—Exploding Bankruptcy Myths
Perhaps the most common, pervasive and inaccurate myth about a bankruptcy filing is that it’s somehow an admission of failure. That’s never been the intention of our current bankruptcy system, which have been around for about 120 years. In fact, the first bankruptcy laws in England were on the books as early as 1542, during the reign of Henry VIII, and the U.S. Congress passed the nation’s first bankruptcy statute in 1800. Here are some bankruptcy myths to consider.
The Promise of a Fresh Start
Bankruptcy is intended to give the “honest but unfortunate” debtor a “fresh start”, and not to punish such persons for the past mistakes or misfortune that led to the bankruptcy filing. Where a purpose can be served or is appropriate, bankruptcy, under Chapters 11, 12 or 13, afford a debtor the means to achieve a financial reorganization and rehabilitation. Lawmakers have long understood that a person’s financial fortunes can be subject to circumstances not under their control, and that even the most astute businessperson may face financial challenges through no fault of their own. In fact, the single biggest factor that causes personal bankruptcy filings is not profligate spending or mismanagement of credit cards, but unanticipated and uncovered medical expenses. Estimates indicate that as many as a million people seek bankruptcy protection every year because they can’t pay hospital or medical bills.
In addition, history is chock-full of examples of ultimately successful people who initially failed and sought protection in bankruptcy. In his first effort to market a “horseless buggy,” Henry Ford only built 20 cars in two years and went belly up. It wasn’t until the formed the Ford Motor Company, his third attempt, that he finally brought in the assembly line that made him famous. Another struggling young entrepreneur, Walter Elias Disney, started his own film company in 1922, but ran out of money when his distributors cheated him, leading to a bankruptcy filing. Even the greatest president in American history, Abraham Lincoln, went bankrupt, losing his horse and surveying gear when he couldn’t pay $1,000 in debts on a general store that he owned.
Our approach is not to dwell on past misfortune or failures, but to help guide our clients forward to financial stability and future success. We help our clients take back control of their lives.
Contact Neuner & Ventura, LLP
We understand the stress, anxiety and confusion that can be associated with a potential bankruptcy filing. We offer a free initial consultation to every client. For an appointment, call a bankruptcy attorney at Neuner & Ventura at 856-596-2828 or send us an e-mail. We do, however, reserve the right to charge a fee to review any work done by another attorney. Evening and weekend appointments are available upon request.
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