Queens, NY (PRWEB) October 04, 2016 -- With the first 2016 presidential debate over and the U.S. presidential campaign coverage reaching a fever pitch, various personal topics about both major party candidates have been covered. One such topic has been Donald Trump’s various bankruptcies over his years as a prominent businessman. His adversaries have called them failures, while those in the Trump camp have called them a drop in the bucket compared to his other successful businesses. A June 21, 2016 article from Politifact did an analysis of Trump’s past after a recent Hillary Clinton comment, confirming that “Trump has actually filed Chapter 11 six times, four times within two years in the 1990s, once more in 2004 and once more in 2009.”
Bruce Feinstein, Esq., a bankruptcy attorney in Queens, New York, is using these recent analyses as a jumping off point for a greater nonpartisan discussion about filling for Chapter 11 business bankruptcy in New York. “Trump’s background as a businessman, rather than a politician, has put his business track record under scrutiny. While leaving discussions of his character or his readiness for office at the door, we can look deeper at the concept of business bankruptcy and what it means for businesses and their owners.”
Public perception brings out a major misunderstanding regarding bankruptcy – the difference between corporate and personal bankruptcy. Personal bankruptcy normally falls under Chapter 7 or Chapter 13 of the bankruptcy code. Chapter 7 bankruptcy is a notably quicker process, with a debt discharge occurring in an average 3-6 months. Most unsecured debts are discharged, and individuals have a chance of keeping some of the their property. Chapter 13 bankruptcy allows more time for an individual to pay back creditors, and most cases involve modifying current loans in order to make them affordable.
Chapter 11 business bankruptcy is a form of reorganization utilized by businesses and can also be called “corporate bankruptcy” or “reorganization bankruptcy.” Mr. Feinstein explains, “During the process, the debtor can operate as a ‘debtor in possession,’ which means that they act as a trustee of the business and remain in control of its operations. The debtor can work towards becoming profitable again while undergoing financial restructuring and repaying debt. Restructuring may include accepting loans from new lenders or canceling unfavorable contracts.”
So while Donald Trump has never personally declared bankruptcy, he has pursued bankruptcy protection for business he owns or controled six times. Most revolve around hus casino property businesses, including hotels and resorts, with several of his companies racking up hundreds of millions of dollars in debt. These failings are owed in part to a struggling gambling business and economic recession. But Mr. Feinstein also points out that not all bankruptcies signal failure. “A corporate bankruptcy filing can happen as a way to save a business. Chapter 11 bankruptcy allows businesses to find ways to reduce their debt and restructure their daily operations without having to shut their doors. Instead of complete liquidation, they can pay their employees and take in money while creating a new budget and formulating a payment plan for their creditors.”
The Law Offices of Bruce Feinstein has nearly two decades of experience in bankruptcy law, helping clients and families resolve their issues and move forward with their lives. Visit bfeinsteinesq.com for more information or call (718) 514-9770 to reach the New York office.
###
Bruce Feinstein, The Law Offices of Bruce Feinstein, Esq., http://feinsteindivorcelaw.com, +1 (718) 514-9770, [email protected]
Share this article