In a previous blog, we glanced at the reported six Chapter 11 bankruptcies filed by President Trump's businesses in the past. According to the Washington Post, these bankruptcies date back to Trump's Atlantic City Taj Mahal in 1991 and end with the 2009 filing by Trump Entertainment Resorts, which sought protection from creditors.
Many celebrities and politicians have used bankruptcy to get out of financial trouble. According to Business Insider, the long list includes MC Hammer, Larry King and Meat Loaf. CNN states that Abraham Lincoln and Walt Disney went bankrupt as young businessmen.
Can bankruptcy help your business?
So what does this mean to you as a small business owner with problem debt? It means that if a large-scale real estate mogul can escape debt through bankruptcy, on multiple occasions, you may be able to take advantage of federal bankruptcy laws, too -- perhaps with shockingly good results.
This is great news.
Do I need to use Chapter 11? Could 7 or 13 work in my case?
Bankruptcy may or may not be the answer to your financial struggles. Whether the problem was caused by business conditions, partnership conflicts, personal difficulties or a combination of multiple factors, you should at least explore your options.
Chapter 11 allows qualifying businesses to restructure their debt and continue to operate. Chapter 13 provides a debt payment plan that can extend over a period of years, while Chapter 7 permits the discharge of certain debts owed by individuals or couples.
Every case is different: Some companies, like Trump's, file for the sweeping protections of an 11, while some small-business owners are able to use 7 or 13 to deal effectively with their debt and reclaim their financial lives.
Talk to an attorney if you need advice
You may be doing everything you can to quell a debt storm, making good choices and working diligently to deal with your creditors. If your best efforts have left you without a solution, get the advice of an experienced business bankruptcy lawyer.
Most bankruptcy attorneys offer a free initial consultation. Bankruptcy should never be taken lightly, but you might be pleasantly surprised at the options that are available to you.