Let Detroit Go Bankrupt!

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If you have been paying attention to the presidential campaign here in the United States the past few weeks, or have even watched a television commercial in the past few months, chances are you have heard President Obama attack Mitt Romney for his position on the auto companies. In the past 7 days at the gym I have seen over 100 campaign ads and more than half of them quote Romney as saying “Let Detroit Go Bankrupt.”

When the financial panic began in 2008, both Romney and Obama stated that they wanted the auto industry to go through a managed bankruptcy in order to remain competitive, viable companies. In fact, Obama actually did take the companies through a managed bankruptcy and provided substantial government loans to help them through it. The only difference between Obama’s plans and Romney’s, is that Romney would have had private companies issue the loans, rather than the government. Either way- the bankruptcy was extremely effective, the government loans were quickly repaid, and the auto industry is back on its feet again.

There are two different things that come to mind when I read the stories from the campaigns about “letting Detroit go bankrupt.” First- is the stigma that still follows the word “bankruptcy” and second- the reality of bankruptcy being an amazing financial tool for companies and individuals to get back on their feet.

A few months ago, I blogged about ‘the sigma’ that filing bankruptcy seems to create. It is a complete myth. See the article here: The Stigma.

Millions of people file for bankruptcy every year. Many famous people (my hero- Abraham Lincoln included) at some point in their life file for bankruptcy protection. The point- bankruptcy is a financial decision, not a moral one. Filing for bankruptcy says nothing about you as a person or the value you have to the people around you. In fact, for many people, filing for bankruptcy is the last step they have to protect their ability to provide for their family.

The most important lesson we can learn about the auto industry filing for bankruptcy is that bankruptcy can rescue you from financial ruin, just like it did the auto industry. Bankruptcy gives you the ability to discharge your debts and to get a fresh start. If its good enough for the American car- then why not you and your family?

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About Jason

My name is Jason Richards, and I am an attorney in Northern Utah. I run my own practice and have offices in Ogden and North Salt Lake. I grew up in Ogden and attended local public schools. I graduated from the University of Utah Law School with a juris doctorate degree. My practice primarily centralizes on bankruptcy and debt collection. I also specialize in criminal defense and other areas of civil litigation. I represent clients who are suffering from crushing debt that seems hopeless. I have helped many people file for relief under Chapter 7 and Chapter 13 of the United States Bankruptcy Code. I have also helped dozens of clients renegotiate their debt and defend them in debt collection actions with ruthless creditors. If not dealt with promptly and aggressively, creditors will achieve their goal to collect. Bankruptcy is certainly not the solution for everyone. Everybody's situation is different. The best way for you to determine if it is right for you is by consulting with a local bankruptcy attorney. Bankruptcy has helped millions of Americans receive a fresh start and financial independence.
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2 Responses to Let Detroit Go Bankrupt!

  1. Bottom line: We’ll never get angry with someone for filing bankruptcy. It’s a difficult, emotional situation. We get that.

  2. Aida Yannone says:

    today, most businesses are in the verge of bankruptcy because of a very bad economy.^

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