While a bankruptcy is something to avoid if possible, too many people we see fail to recognize that in the right circumstances, a fresh start through bankruptcy may be what is needed to move on to a successful future. Harry S. Truman, our 33rd President is a case in point. The New York Times recently posted an article which tells his story, For Truman, the Buck Stopped at a Failed Business .
After serving in World War I, Truman, buoyed by some earlier business success, set up a men’s haberdashery shop in Kansas City, selling fine men’s clothing and furnishings. But due to economic conditions beyond his control, namely the post war bust and unemployment (as well as other factors) the business failed. Truman was forced into bankruptcy. Creditors were paid over time at as little as 10 cents on the dollar.
Truman went on to a successful career, first as an administrative judge then as a U.S. Senator, then as Vice President, and finally as President following the death of Franlin Delano Roosevelt. Truman no doubt put the hard lessons of financial failure to good use.
Truman’s is not the only such story. He is joined by the likes of Henry Ford and Walt Disney, whose early business failures were surpassed by later success.
A bankruptcy allows, and indeed requires, that a debtor pay creditors out of assets or income to the extent these are available after payment of necessary living expenses or retention of property which is allowed to be kept through exemptions. Even paying creditors substantial or full percentages of the money owed can be a relief and big benefit. In a bankruptcy this payment is controlled, as are the collection efforts of creditors.
Time and again, we have seen success stories as our clients have been able to move past bankruptcy to overcome mistakes or misfortune and to move on to successful and productive lives.