December 14th, 2006 3:31 pm
Why Should I NOT File Bankruptcy?
I was talking with a friend the other day abou bankruptcy.
He thinks the smart thing for me to do is to file bankruptcy and start fresh.
It’s clear my intent was never to defraud any of the lenders. I was borrowing with the intent to pay it back. Because of my inexperience I made some mistakes and got into trouble. This is a typical business startup situation. Most succesful business owners have failed several times before finally succeeding. (Only losers quit after their first failure.)
So why shouldn’t I just bankruptcy out and start fresh? Most people I know and my readers here think I should… if I can qualify for chapter 7.
After talking to a couple of bankruptcy attorneys it looks like I should have no problems qualifying for chapter 7 bankruptcy where my debts will be wiped out / forgiven / discharged.
My credit is already screwed up so a bankruptcy is not going to make it that much worse. Plus, I already know how to buy houses without credit by taking over payments.
And I don’t want to get any new personal credit cards so I can learn to live on cash only. (On the business side I would use corporate credit. Business credit = good credit because it will make me money.)
So since having a bankruptcy on my credit is not going to affect me that much , why would I NOT file bankruptcy right now?
I have only had two reasons holding me back from BK’ing out:
1) Ethical / moral issues covered in my prior entry: To BK or Not BK - the Moral Issues with Bankruptcy
2) The challenge of Paying Back Every Dirty Penny creatively.
I am starting to think though that I am wrong in thinking that filing bankruptcy out of a legitimate need is un-ethical.
I also may be a little overly optimistic about being able to pay back this debt creatively.
Sure it would make for a great story to avoid bancruptcy and pay it all back… but… how possible is it really? And how long will it take?
Instead of being cripled by all this debt (potentially for many many years), wouldn’t I be a much better contributor to society if I get a fresh start and build a succesful business that creates jobs and adds value?
Really, WHY should I NOT just declare bankruptcy and start fresh?