Bankruptcy vs debt consolidation, which one is right for your current debt problems?

Bankruptcy is the ultimate unwanted and very unattractive financial situation for anyone to find themselves in. Once you have filed for bankruptcy, it can be hard to get back on your feet again. Despite this, by combining some smart choices with hard work and determination, it is possible to get your financial life back on track.

Many view financial destitution and bankruptcy as discussion topics that should be avoided at all costs. They often appear as one of the single worst scenarios’s to endure. However, there are various examples in society of those who have had it all, only to lose it all later on and in some cases build it all back.

A prime example is MC Hammer; a successful rapper from the late 80’s who managed to earn a concrete fortune of $33 million. Known by many for his one hit wonder ‘U Can’t Touch This’, MC Hammer looked as though he was set for life.

However, after spending a generous $12 million on building a house, MC Hammer continued to live an overtly lavish lifestyle. In 1996, MC Hammer’s extravagant and frivolous purchases got the better of him and he was forced to file for bankruptcy.

There is also the childhood character Mickey Mouse that we all know and love. Walt Disney created this world famous multi million dollar personality yet still managed to end up bankrupt. It all began in 1902 when Disney, along with his friend Ubbe Iwerks, created The Iwerks-Disney Commercial Artists.

When Iwerks left to work for the Kansas City Film Ad Company, things started to take a downward spiral for Disney. Disney’s finances began to suffer and eventually he was forced to file for bankruptcy. His financial backers were given full control of the business.

Numerous famous bankrupts exist such as Francis Ford Coppola (producer of films like The Godfather Trilogy, Sleepy Hollow, and Lost in Translation), Oscar Wilde (playwright, poet and novelist) and Meatloaf (singer/actor).

Multiple bankrupt, Donald Trump, is someone that you would most likely know not because of his wealth, but because of his well known his renowned and callous catchphrase, “You’re fired!”.

Donald Trump began his career in the New York real estate business, The Trump Organization, which belonged to his father. By developing his fathers company into the Manhattan market and landing several large scale real estate development projects, Donald Trump was able to build a successful career.

In 1989, the after effects of an economic recession started to take their toll and Trump was left with several large debts. In order to finance a project on the Trump Tai Mahel, Trump had to source several more loans which had an extreme negative effect on his finances. In 1991, Trump filed for business bankruptcy due to a $3.5 billion dollar business debt. He also had a $900 million personal debt.

By 1994, Trump had managed to eradicate the majority of his debt by reselling several parts of the business and several shares. At this stage, Trump still had a steady income source from New York Trump Towers and three casinos in Atlantic City.

Trump combined his casino holdings into the Trump Hotels & Casino Resorts which were publicly owned. Over the next few years the value of the company’s stock continued to notably drop. Trump proceeded to struggle for the next nine years and was eventually forced to file for bankruptcy again.

Despite two previous bankruptcies under his belt, Trump was able to build back his financial career once again. In 2005, Trump Entertainment Resort Holdings was created by Trump. By late 2007, Trump’s assets were worth an estimated $3 billion dollars.

The above examples show that bankruptcy, although highly undesirable, does not mean the end of the world for those who endure it. Both Walt Disney and Donald Trumps proved that with a lot of hard work, it is still possible to build a flourishing financial life.

It will not be easy at first and it is likely that the road to return will present an assortment of problems. The main thing is to learn from your mistakes and make better choices the next time around. There is still potential for success, even if you do not have the money to begin with.

About the Author:

Greg Ellis co-founded Cash Doctors, Australia’s largest online cash advance lender. The founders understand their clients needs intimately, having needed a source of fast, convenient credit in years gone by. Cashdoctors.com.au

Greg Ellis | Bankruptcy Basics |

Tags: bankruptcy statistics

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