www.CostaRicaTicas.com

I guy goes to his rabbi, telling him that he (the rabbi) is his last resort. He said his business is failing, he is losing his home, and has barely enough to eat. The rabbi advises the guy to go to the ocean, sitting by the water, holding a torah (bible). The wind will change the pages, with one page finally staying in place. That page will tell him what to do.

Years later, the guy visits the rabbi, thanking him for his words. The guy said that his business is thriving, and he has millions in the bank. The rabbi asked him what the torah told him.

The guy said: "Chapter 11."

A MOST EXCELLENT financial planning tool.....good on you!

PS: Don't forget Chapter 13, Title 11 for them pesky personal thingys....

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"Actual happiness always looks pretty squalid in comparison with the over-compensations for misery. And, of course, stability isn't nearly so spectacular as instability. And being contented has none of the glamour of a good fight against misfortune, none of the picturesqueness of a struggle with temptation, or a fatal overthrow by passion or doubt. Happiness is never grand."
- Aldous Huxley, Brave New World, Ch. 16

Businesses may be able to get a fresh start but thanks to our bought-and-sold Congress, human beings can't, and are afflicted with all manner of moral precepts when they make the sound biz decision to walk away from their underwater mortgages ("strategic default" it's called, and subjects one to calumny and bad credit for up to 7 years). Oy, such a business.

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"A man accustomed to hear only the echo of his own sentiments, soon bars all the common avenues of delight, and has no part in the general gratification of mankind"--Dr. Johnson
"Amen, brother"-ED

A business which has declared bankruptcy can get a loan for the best interest rate that some other party is willing to give them. They may (or may not) decide that such a loan is advantageous for them.

The exact same applies to a person who has declared bankruptcy and/or "made a sound biz decision".

The difference being that a business can shed itself of all debt and break such as labor contracts; a human being is afforded under current law, no such "lluxury", all human beings being viewed as actual or prospective fraudsters. Shall we continue this debate?

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"A man accustomed to hear only the echo of his own sentiments, soon bars all the common avenues of delight, and has no part in the general gratification of mankind"--Dr. Johnson
"Amen, brother"-ED

This is the joke section isn't it? As a joke, I give it a thumbs up.

You may be aware that Chs. 7 and 13 apply to individuals. The latter will give an individual a few years to pay off his debts. It is only available to people who have a reliable stream of income. The former results in quick liquidation and, thus, gives the bankrupt a "fresh start."

While Chapter 7 bankruptcy is technically available to individuals, the "means test" with its absurdly low trigger threshold imposed by the '05 BAPCA and the subsequent presumption of prospective bankrupt's abuse means it is not really available with any meaningful present or near-future income stream. Chapter 13 means you are on the hook for 5 or 10 year payback of every dime owed. Here's the Wikipedia articles on these 2 Chapters:
http://en.wikipedia.org/wiki/Chapter_7, ... ndividuals

http://en.wikipedia.org/wiki/Chapter_13 ... tates_Code

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"A man accustomed to hear only the echo of his own sentiments, soon bars all the common avenues of delight, and has no part in the general gratification of mankind"--Dr. Johnson
"Amen, brother"-ED

That's some serious goal post moving Jazz. You start out with "Businesses may be able to get a fresh start but thanks to our bought-and-sold Congress, human beings can't", and end by linking to explanations of several types of bankruptcy for ... individuals.

You seem to believe that businesses have some kind of fantastic deal going on by going into bankruptcy. If it's such a great deal, why don't businesses seem to feel that way? Why do they avoid it so? A business isn't a person, it is (essentially) an investment. If it's a great deal, then it would be good for your investment, right? Let's look at what happens according to your own links:

Chapter 7:

Chapter 11: , and my favorite

WOW. I never realized what a fantastic deal that was for a business owner. You can have the operation of your company taken away, all your assets sold, and be left with nothing. What a bargain.

The central idea remains--The business's owners don't suffer personal opprobrium nor do their credit ratings suffer; not so natural persons. It's quite common in the construction industry to declare bankruptcy after a project is finished to abrogate any lingering contracts and so they can start fresh on the next project. In sum, it's a quasi-legitimate tool for business with no immoral overtones; OTOH look at the hoo-ha when a homeowner uses "strategic default", a rational decision to walk away from an underwater mortgage--they are lambasted as near to the Anti-christ. The "start fresh" opportunity was available to natural persons til the banks "persuaded" Congress that fraud was rampant by people and thus Congress made it much tougher to declare personal bankruptcy. You can date all the credit card company abuses (hidden fees, fee costs that had no connection with actual costs for such as late payment, "universal default" [pay your gas bill a day late and all your CC interest rates went to the max], buying the legislature of South Dakota so CC companies could impose near-usurious interest rates and all others) from passage of these new bankruptcy laws and the CC banks had it planned this way all along.

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"A man accustomed to hear only the echo of his own sentiments, soon bars all the common avenues of delight, and has no part in the general gratification of mankind"--Dr. Johnson
"Amen, brother"-ED