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Some individuals and small business owners are hesitant to file for bankruptcy on the assumption that it is "morally wrong" and that they must pay off their debt at any cost to maintain their accountability and stay true to their promises. While this is an ideal way of thinking, larger companies and wealthy individuals file for bankruptcy regularly and it has become more accepted for bigger businesses to cut a break since the recession began. It is only fair that smaller businesses and less wealthy individuals, the ones who truly cannot pull together the resources, be able to do the same when necessary.
Corporations, wealthy individuals, and now even big cities are filing for bankruptcy to write off billions of dollars owed to creditors. In June, Stockholm, CA, the biggest municipality in the state, filed for chapter 9 and bankruptcy protection, and more recently, San Bernardino has followed suit. These large cities owe millions of dollars to those who did business with them. If anything is unfair, it is that these entities can write off their debts, leaving their creditors, small businesses, in the dust.
Responsible individuals and business owners who have done everything they can to repay their creditors are not always going to be successful. It is only fair that these people be able to start with a clean slate after their bona fide efforts do not fall through. If you or your business has been struggling to pay off debt, and there is no way to go forward without accumulating more liability, filing for bankruptcy may be the best and morally right option. If you are considering filing for bankruptcy, contact our office for more information.
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