In the past, filing bankruptcy always carried a stigma associated with failure. While many individuals believe people who file for bankruptcy are losers, when a multimillion dollar corporation does it they come out winners and believe it's a great idea. It's interesting how it's perceived differently for some. When a CEO of a big corporation wants to downsize or eliminate a union contract, they will enter a bankruptcy filing for re-organization. Typically, they will file a Chapter 11 bankruptcy, that will allow them to negotiate lower balances with their vendors and even eliminate employee contracts that are saddling the company. Usually they will leave a bankruptcy filing being leaner and meaner than before.
On the other hand, when the average Joe decides filing bankruptcy is his way out of debt, he will have to make sure that he uses a bankruptcy attorney that is familiar with this type of case to protect as much property as possible through the bankruptcy exemption laws. In the case of a personal bankruptcy, if average Joe leaves anything unprotected there is a possibility that the bankruptcy trustee can take it to disperse it to the creditors. After Joe gets his bankruptcy discharge, he will have trouble getting credit for a couple years as he has to regain the trust of the creditors he filed bankruptcy on.
Back to the corporation, everything is a different story. When a corporation files Chapter 11 bankruptcy, the company will benefit by not having to pay its vendors temporarily while re-organizing. The bankruptcy attorney will negotiate a reorganization plan to reduce their debt and go back into business being stronger and more profitable. There are many companies that filed bankruptcy every seven years to clear out the books. Hopefully, you are not one of the vendors at the time of the bankruptcy filing. When a corporation is saddled with an unfavorable employee contract, usually union, they can file for bankruptcy and rip up the contract. The bankruptcy judge can avoid any obligation that the company has that they believe will interfere with the company exiting bankruptcy. Whatever it takes the corporation filing for bankruptcy takes precedent. The bankruptcy judge can even temporarily stop the company paying into the employee pension fund until a new contract is negotiated. In some cases, the court can eliminate the pension entirely if it will help the company to be successful after exiting the bankruptcy filing. When a corporation is filing bankruptcy many times the union will hire an attorney of their own to represent the employees in the bankruptcy filing.
When looking at the comparison between average Joe and a corporation you can see there's not much difference except for perception. Average Joe can use filing bankruptcy for the same benefits if he has good legal counsel from a competent bankruptcy attorney. It's not a good idea to use the same reasons for filing bankruptcy as corporations do, but when you get into trouble there is nothing wrong with it.
On the other hand, when the average Joe decides filing bankruptcy is his way out of debt, he will have to make sure that he uses a bankruptcy attorney that is familiar with this type of case to protect as much property as possible through the bankruptcy exemption laws. In the case of a personal bankruptcy, if average Joe leaves anything unprotected there is a possibility that the bankruptcy trustee can take it to disperse it to the creditors. After Joe gets his bankruptcy discharge, he will have trouble getting credit for a couple years as he has to regain the trust of the creditors he filed bankruptcy on.
Back to the corporation, everything is a different story. When a corporation files Chapter 11 bankruptcy, the company will benefit by not having to pay its vendors temporarily while re-organizing. The bankruptcy attorney will negotiate a reorganization plan to reduce their debt and go back into business being stronger and more profitable. There are many companies that filed bankruptcy every seven years to clear out the books. Hopefully, you are not one of the vendors at the time of the bankruptcy filing. When a corporation is saddled with an unfavorable employee contract, usually union, they can file for bankruptcy and rip up the contract. The bankruptcy judge can avoid any obligation that the company has that they believe will interfere with the company exiting bankruptcy. Whatever it takes the corporation filing for bankruptcy takes precedent. The bankruptcy judge can even temporarily stop the company paying into the employee pension fund until a new contract is negotiated. In some cases, the court can eliminate the pension entirely if it will help the company to be successful after exiting the bankruptcy filing. When a corporation is filing bankruptcy many times the union will hire an attorney of their own to represent the employees in the bankruptcy filing.
When looking at the comparison between average Joe and a corporation you can see there's not much difference except for perception. Average Joe can use filing bankruptcy for the same benefits if he has good legal counsel from a competent bankruptcy attorney. It's not a good idea to use the same reasons for filing bankruptcy as corporations do, but when you get into trouble there is nothing wrong with it.
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