An Honest Look At Bankruptcy

An Honest Look At Bankruptcy

A few years back I took a leap at what seemed to be a can’t miss business opportunity at the time. The asking price was a few hundred thousand dollars, but the upside was legitimately millions of dollars. Due to new legislation that had been put in place, hundreds of thousands of locations around the country were going to be forced to purchase a product that this business was a first mover in. We did the math and there was almost no way as an early mover that we couldn’t make $14 million or more. Thinking back on the excitement of that time, it was hard to imagine a couple of years later I’d be sitting with the best bankruptcy attorney Lansing had to offer to discuss my options for a business that was floundering in every way imaginable.

First and foremost, please know that I never declared bankruptcy. I sold the business at a loss that would make generations of my family roll over in their graves. But I did manage to avoid bankruptcy.

So, what did I learn in this process. First, from a purely inside out view, there are many personal benefits for bankruptcy in certain situations. There are protections that save you from being completely buried in debt for the rest of your life and you can sometimes manage things like wage garnishment much better or avoid repossession in certain circumstances. That said, I still felt a little dirty about it which is why I took the loss. With all the talk of Donald Trump’s bankruptcy on TV recently it’s made me reflect on this moment as a small business owner. I realize large corporations end up in the same situation where they get overextended or the market changes (as it did with my business due to changes in the initial legislation and a shifted timeline), but someone ends up taking it on the chin one way or the other and I felt a certain obligation to get myself out of my situation without going the route of bankruptcy. Granted, if I wouldn’t have been able to find a buyer I may not have had any other options to prevent myself from drowning – but it makes me wonder how many people/companies reach for the life preserver long before it’s the last resort…