The first Presidential debate of the campaign season was one of the most watched in history, no doubt thanks to Donald Trump’s entry into the race. The tycoon-turned-politician has attracted a great deal of media attention since announcing his bid for the highest office in the land.
Earlier this month, some 24 million viewers tuned in to see “The Donald” and his fellow GOP hopefuls face the nation and a panel of journalists. Weeks later, it’s still the water-cooler topic du jour.
One issue that caught our attention in particular was that of bankruptcy. The moderators asked Trump to address questions about the bankruptcy filings in his business history, and his answer ignited considerable controversy in the aftermath.
Unfortunately, much of the ensuing media discussion about bankruptcy has been muddled and rather imprecise. We fear that may lead to some general confusion about bankruptcy, who’s allowed to file for it, whether it’s a bad thing, and how it works.
As Orlando bankruptcy attorneys, we are not here to weigh in on the Trump candidacy, the journalists’ questions, or any of the hopefuls’ responses. Rather, we simply want to make sure that our readers have a clear understanding about filing for bankruptcy in Florida. Let’s take a look.
Filing for Bankruptcy in Florida: How It Works
At the outset, it is important to understand that there are different forms of bankruptcy. Some are available to individuals who need relief from their personal debts. Others are available to companies and serve as lifelines for businesses struggling under their own corporate debts.
Three of the most common types of bankruptcy in Florida are:
- Chapter 7 — Allows an individual to “discharge” or “liquidate” certain types of debt (including credit card debts, medical bills, etc.). The debtor must give up some — but not all — of his or her assets to satisfy those debts. Some people call this “straight bankruptcy.”
- Chapter 11 —Reserved for businesses, Chapter 11 bankruptcy allows a business organization to stay in operation while paying off some of its debts over time. It’s a complicated process but it can be a tremendous help to businesses going through a rough patch.
- Chapter 13 — Available to individuals who meet certain minimum income requirements, Chapter 13 bankruptcy is another complex procedure that can prove very helpful to people who are struggling in their finances. Chapter 13 bankruptcy allows you to hold onto your assets while making monthly payments with a court’s approval.
To consult with an experienced bankruptcy lawyer today, call 855-686-6752
How Can Someone Who Has Declared Bankruptcy Still Be a Billionaire?
As you can see, there is a difference between individual bankruptcy and corporate bankruptcy, which brings us to Donald Trump. As Forbes reports, while Trump has never filed for bankruptcy as an individual, four of the various businesses he’s owned over the years have filed for Chapter 11 bankruptcy.
Accordingly, Trump’s bankruptcy filings may not have affected his personal fortune so much as the business prospects (and liabilities) of those four specific ventures. Indeed, businesses often file for bankruptcy as a strategic move when facing mounting debt from aggressive lenders.
Of course, what is bad for business is often also bad for the people behind the business. Bankruptcy is never anyone’s first choice, but it isn’t necessarily a token of doom either.
Unfortunately, when the news media talk about bankruptcy, they do so in short form. It is a complicated topic, but journalists and pundits don’t always have the time (or the inclination) to dive into the details.
As Orlando business attorneys, we hope you’ll take the time to talk with experienced professionals before making any decisions about your own options for bankruptcy, whether for your business or for yourself. Here’s what you can take away from the Trump story:
- There are different types of bankruptcy in Florida, and some are more advantageous than others.
- There is a difference between filing for bankruptcy as a business and filing as an individual, though any company’s economic misfortune is likely to affect its owners’ personal finances as well.
- “Bankruptcy” isn’t a bad word. The law allows it for a reason, and it has helped many now-thriving businesses stay afloat during a temporary downturn.
- Bankruptcy is a very complicated issue. You shouldn’t rule it out until you’ve talked with an experienced Orlando business lawyer.
…Trump has never filed for bankruptcy as an individual, four of the various businesses he’s owned over the years have filed for Chapter 11 bankruptcy.
If you are considering bankruptcy, please fill out our Bankruptcy Questionnaire to receive a discount on a 30-minute consultation with one of our experienced Orlando bankruptcy attorneys.
NOTICE: The article above is not intended to serve as legal advice, and you should not rely on it as such. It is offered only as general information. You should consult with a duly licensed attorney regarding your Florida legal matter, as every situation is unique. Please know that merely reading this article, subscribing to this blog, or otherwise contacting Bogin, Munns & Munns does not establish an attorney-client relationship with our firm. Should you seek legal representation from Bogin, Munns & Munns, any such representation must first be agreed to by the firm and confirmed in a written agreement.