Bankruptcy in Indiana – a Process, Not an Event!

August 18, 2012 7:45 pm Published by

“In bankruptcy, you need to spend money to save money.” At least that was the “counterintuitive finding of a new bankruptcy study by two university professors”.

In order to bring the very latest news to Bankruptcy in Indiana readers and clients of the five Zuckerberg bankruptcy law offices, I read a lot – professional journals, books, newspapers, magazines, and – websites.  This fascinating study, completed by one professor in Ontario, Canada and one finance professor in Hong Kong, had to do with big corporations who file Chapter 11 bankruptcy and pay bonuses to their executives to entice them to remain with the company and help get it back on its financial feet.

I was discussing the issue with the Columbus bankruptcy lawyers in my office there.  Of course, the first thing that comes to mind is – Shouldn’t the company be using whatever money they have to pay its debts?  If they’re paying bonuses to executives, there’s less money for creditors, it at first seemed to all our Indiana attorneys for bankruptcy.

Turns out, the opposite is the case. If the leaders and key employees of the bankruptcy company stick around (and their bonuses are tied to the success of the plan), then creditors actually benefit more in the end.

Now, the companies in the study were large public corporations.  But what lessons can we learn from this, I asked myself, when it comes to small business bankruptcy in Indiana or even individual bankruptcy in Indiana?  Here are my thoughts:

 

  • If you need to file Indiana bankruptcy, or think you might, you want to enlist affordable professional help from a lawyer who does nothing but bankruptcy. It’s the same spend-money-to-save-money principle.
     
  • Firms that retain top executives with bonus plans are more likely to emerge from bankruptcy with a shorter duration and with no violations of the rules, the study found.
     
  • It’s the same with personal bankruptcy in Indiana – having a professional by your side saves time and trouble.
     
  • Does Indiana bankruptcy law require you to have an attorney at all? No! You can even find the forms you need online. Keep in mind, though, there's an awful lot to the process – the timing of the different steps, the requirements, the terminology. People filing bankruptcy are already under quite a bit of stress. It's hardly the time for them to get educated in a complex area of the law, especially when mistakes can have such serious results!

“In bankruptcy, you need to spend money to save money.”

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This post was written by Mark Zuckerberg

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