Mayor Bloomberg in Chapter 7 Bankruptcy?
Do you see the glass as half-full or half-empty? If you see the glass as half-full you are probably an optimistic person and have tendencies of becoming an entrepreneur. True entrepreneurs do not see a stigma associated with bankruptcy. In fact, most entrepreneurs have difficult times along their path to success. Aside from various musicians such as Run DMC and Wayne Newton many business gurus such as Donald Trump and Walt Disney have been involved in bankruptcy. At the end of the day bankruptcy is simply a business decision to deal with debts and move forward.
For those of you unfamiliar with Chapter 7 bankruptcy it is also called liquidation bankruptcy. In Chapter 7 proceedings a trustee is appointed to administer the debtor’s estate (person who filed for bankruptcy). Each debtor is entitled to exemptions protecting assets he or she owns. If the assets are worth more than the exemptions some of the assets may be sold to pay off a portion of the debtor’s debt.
If Mayor Bloomberg were to file for Chapter 7 bankruptcy he would remain a rich man and probably view the bankruptcy process as a way to pay off all of his debts. Forbes Magazine estimates that as of March 2013 his net worth was approximately 27 billion dollars. So presumably, if he were to file for chapter 7 bankruptcy a trustee would liquidate some of his assets and pay off all of his debts and leave him debt free with 27 billion dollars. Not bad for coming out of bankruptcy!
War stories from my office
Interestingly, I have had a few clients who have actually made money by filing for Chapter 7 bankruptcy. One particular client had recently lost his co-op in the Bronx, which was valued at $350,000. He was behind on his maintenance fees because he lost his job so the co-op association moved to foreclose on his apartment. My client was not able to sell the apartment so he was about to lose everything. Now the important factor here was that the stock for his co-op had not officially changed hands yet. Aside from the co-op maintenance owed, he had a $15,000 mortgage and some credit card debt. He had over $100,000 in equity! Immediately, we filed a Chapter 7 bankruptcy to stop the shares from changing hands, the trustee was able to pay off all of his debts and it looks like he will get about $60,000 back from his Chapter 7 case! This is not a typical result but it illustrates how if money is left over after paying off debts in a Chapter 7 bankruptcy this money will go back to the debtor.
In another recent case, I had a client come into my office with overwhelming debts and lawsuits. His debts were from a past business that went horribly wrong. He said, “I have learned so much from my mistakes and if I can get a second chance I am going to do very, very well!”. He was getting ready to launch a new business with tons of potential. He was not ashamed, embarrassed or afraid of filing for bankruptcy but excited to deal with his finances so that he could get on the road to success. In his case everything worked out. His clothing business is taking off and he is happier than ever.
What you should get out of all of this is that bankruptcy is not the end but a way to start over. The road to success is often a bumpy one and bankruptcy is just one of those bumps.
If you live in New York and are interested a free bankruptcy consultation please call 212-244-2882 anytime. The Law Office of William Waldner only practices Bankruptcy Law and is always here to help you.
This article is intended for educational purposes only. By reading this article no attorney-client relationship has been created.