Most Florida readers probably don’t think of bankruptcy as a good thing, but in fact the process of resolving unpaid debts and settling disputes with creditors can be very positive for many people. Bankruptcy can become a part of the picture after a job loss or a business closes, leaving Florida residents with few options but to restructure their debt and move forward.
As a country that values entrepreneurship and small businesses, we also accept a basic amount or risk involved with such ventures. Entrepreneurs and owners of small businesses often blur the line between personal and company finances, sinking large amounts of their savings and using credit to keep the company afloat in the hopes that good times are ahead and the idea will be a success.
Unfortunately, when the idea or the business is not a success, personal finance suffers as well. This can create significant hardship for Florida families already burdened by a tough housing and job market. Fortunately in Florida and around the country, small business owners and individuals have the option of declaring bankruptcy.
Bankruptcy may not seem like a good option from the outset, but in fact it offers a meaningful fresh start for people who are overburdened by debt. This can also be a valuable tool for starting over and rebuilding after a business has not been profitable or has had to close.
Once the slate has been cleared and someone declaring bankruptcy has started over, there is actually a benefit to the financial system overall. The debt is no longer considered delinquent and there is often a plan for partial repayment. The financial system benefits from the clearing of the debt, allowing both parties to move on and be productive beyond the tasks of being a collector or a debtor. Forgiven debts also help the credit markets recover as loans to individuals and businesses become less risky.
Source: The Wall Street Journal, “Why a Flood of Bankruptcies Is Good For America,” Michael J. Casey, Feb. 6, 2013