For many people, Bankruptcy is a bad word, one that conjures up images of failure, disgrace and dishonor. It shouldn’t be that way.
Famous Persons who have filed a bankruptcy petition.
Lets start with the honor roll. Some of the many Celebrities who either filed for bankruptcy, or would have, had modern bankruptcy laws been available) include Francis Bacon, Harry S. Truman, Thomas Jefferson, Wayne Newton and Walt Disney (from the book, They Went Broke). Several of Donald Trump’s businesses have filed. Major corporations have included General Motors, Exxon, and Lehman Brothers Holdings (ranked as the largest filing ever).
In the area where I practice (Blair County, Pennsylvania), we have had Doctors, Lawyers, a former County Commissioner, and several notable local businesses file.
Anyone filing a bankruptcy petition is in good company.
Legal and Moral Basis for the Bankruptcy Laws
Getting relief from debts is a time-honored tradition. It is in the United States Constitution Article I, §8: “The Congress shall have power … To establish … uniform Laws on the subject of Bankruptcies throughout the United States.”
The Bible also mentions obtaining a release from debt: “At the end of every seven years you shall grant a release. And this is the manner of the release: every creditor shall release what he has lent to his neighbor, his brother, because the Lord’s release has been proclaimed” Deuteronomy 15:1-2
Individuals who are facing Credit Card Lawsuits, Mortgage Foreclosure, or Creditor harassment should consider bankruptcy as one of their legal options.
The Bankruptcy Code Balances the Rights of Debtors and Creditors
The current Bankruptcy Code was the product of years of lobbying by banks and credit card companies. Congress, exercising its Constitutional powers, drew a line, known as the means test, that affects who is eligible for a discharge, and what they must do to obtain it. Those debtors who are eligible for relief from debt are acting in a lawful manner, and should not be ashamed or reluctant to take advantage of the law.
Congress also determined which debts can be discharged. For example, it is very difficult to discharge a student loan, and impossible to get out of child support obligations through bankruptcy.