This chapter dived into the topic of a business filing for chapter 11 bankruptcy. It’s titled “When Filing For Bankruptcy Is Your Best Option, Do It Early!†Cloutier talked about how while many people have a very negative social view of bankruptcy, sometimes it just makes perfect sense and that the law of bankruptcy was invented for a reason.
He used examples such as how certain people would refuse to file for a chapter 11 bankruptcy and instead go through extreme lengths to stay afloat such as mortgaging their homes. In the end they had nothing left. Compare that to people that go ahead with it and it gave them a tremendous amount of time to get things back into shape as well as reducing their debt.
The drawbacks were mentioned though where if you do file for chapter 11 that the judge will get to control a lot of your actions during your restructure. He made an interesting remark about lawyers though implying that a lot of them try and make bankruptcy sound like such a hard thing when it is fairly straight forward. It seemed like he was implying that they just want to make more money off of you this way.
In a nutshell, you should basically do this if the numbers make sense and not by your emotions. Makes sense overall I’d say and nothing was really controversial about this chapter. That’s usually why people try to separate their personal income and assets from a business too where if something goes bad with the business you can still be protected personally.
What an interesting coincidence too where chapter 11 was about chapter 11 bankruptcy.