You are not alone if you are considering filing for bankruptcy. Donald Trump has filed bankruptcy on behalf of his businesses four times. While Donald Trump has never filed for personal bankruptcy, he has sought debt relief for several of his business interests. But, as Trump would tell you, he is wealthy. Very wealthy. Why, then, would his businesses file for bankruptcy? Perhaps the nexus between Trump and bankruptcy is partially accountable for his wealth.
As this news story points out, Trump’s businesses accumulated too much debt. With more debt than income to afford it, Trump and bankruptcy became a team for these businesses. Though these businesses filed for Chapter 11 Bankruptcy reorganization, the bankruptcy effect was the same as the most common consumer bankruptcies (Chapter 7 and 13) individuals file. Trump filed bankruptcy to limit and eliminate his business debt. His businesses simply couldn’t afford the debt. Bankruptcy law allowed the debt to be eliminated, lessened or refinanced through the bankruptcy court. Bankruptcy can do this for business debt. And bankruptcy can do this for personal debt. It is why businesses and individuals file for bankruptcy.
Trump may have earned his fortune through “the art of the deal.” But Trump and bankruptcy teamed when the deal went south. Bankruptcy is a business move. Nobody knows this more than Trump. Considering bankruptcy as nothing more than a financial function for the betterment of his businesses served Trump well. Bankruptcy can provide the same utility to individuals filing for bankruptcy. It’s no mystery or science that debt is as much a burden to individuals as it is to businesses. By the same token, eliminating debt is a benefit to both.
Individuals, unlike businesses, are often wary of filing for bankruptcy. Perhaps there is a stigma or some sense of moral failing associated with filing for personal bankruptcy. But it shouldn’t. Debt is part of personal finance. Dealing with personal debt should be considered no different than dealing with business debt. Trump and bankruptcy teamed to deal with debt for his businesses. Individuals can do the same with bankruptcy to benefit their personal financial picture. It’s that simple.