Things change over time. From social norms to state laws, the way things were 80 years ago is not the way they are now. Not only has our view on fashion and politics changed, but so has our view on debt and finances. According to an article in USA Today, our modern day method of dealing with debt hasn’t hurt, but actually helped capitalism and our nation’s progress.
In 1922, after his failed clothing store left him broke and struggling, Harry Truman couldn’t imagine filing bankruptcy on his creditors. It was believed to have taken him 20 years to completely pay off his debts. Even though he struggled for nearly two decades, to the future president, bankruptcy was not an option.
Fast-forward to the present and see how things have changed. Not only do we have a presidential hopeful with enough assets to finance his own campaign, but he has also admittedly taken advantage of the nation’s very lenient bankruptcy laws to discharge debts related to four failed business ventures. Donald Trump has never been shy when discussing his decision to file bankruptcy and defends it by saying how very common it is among entrepreneurs as well as individuals.
Individual bankruptcy filings are 80 times higher now than they were a century ago. Not only is the process pretty straightforward, but bankruptcy trustees and judges are much more lenient on consumers now than ever before. Part of this leniency is due to the fact that without it, consumerism and free enterprise would be out the window. So much of our economy is based on people creating, inventing and running small businesses. Without the second chances given to those that fail, our economy would probably be stagnant.
For individuals, filing bankruptcy may put them in a better situation to be an active and responsible consumer. For entrepreneurs, bankruptcy is a way to start fresh with new and innovative ideas. Individuals in need of a fresh start should speak to a bankruptcy attorney to find out how to the bankruptcy code can work for them.