“Whether you le for bankruptcy or not, your strengths are still your strengths.”

Samuel Langhorne Clemens, also known by his pen name Mark Twain, is perhaps best known for writing Adventures of Huckleberry Finn, which has been called “The Great American Novel.”

Twain enjoyed financial success from his writings and lectures, but he lost money in business ventures. Specifically, he attempted to create his own publishing house, and he invested too much money in the Paige Compositor, inventor James Paige’s failed attempt to innovate an automatic typesetting machine. In 1984, Twain was forced to le for bankruptcy after running out of money.

He later chose to pay all of his pre-bankruptcy creditors in full, despite having no legal obligation to do so. When Twain died in 1910 of a heart attack, his estate was valued at $471,000, which is about $12 million in today’s dollars.

That said, Twain was not a great businessman, and his history reflects this. He was, however, a prolific writer and speaker. Bankruptcy could not take this away from him.

Here is the lesson to be learned from Mark Twain: Whether you le for bankruptcy or not, your strengths are still your strengths. Whatever makes you great still makes you great. Just as Mark Twain continued to be a great writer and orator, you continue to be who you are.

And just as Mark Twain is defined by his successes more than his failures, you should define yourself by your successes rather than your failures. Remember, this is just one step in a journey of many, many steps.

“When you make a choice to shift your thinking about your bankruptcy, you will likely extract a number of lessons that make you wiser and stronger in the years ahead.”

George McGovern, who died in 2012, was the Democratic Party’s 1972 presidential nominee, as well as a U.S. Representative and U.S. Senator. In 1972,

McGovern lost the presidential election to Richard Nixon, and by a landslide.

Perhaps this massive public defeat, and the subsequent resilience it required, is what prepared him to extract valuable lessons from his subsequent bankruptcy. In 1988, McGovern bought and renovated a hotel in Connecticut, but two years later, the hotel went into bankruptcy. As a public figure, McGovern’s bankruptcy made national news.

Later, McGovern reflected on his bankruptcy, saying that he wished he had “this firsthand experience about the difficulties business people face every day” while he was in public office. “That knowledge would have made me a better U.S. senator and a more understanding presidential contender.”

Who would have blamed McGovern for hanging his head in shame and hiding from the spotlight? Certainly, this is what many people might have chosen to do. But McGovern chose a different path: He turned his past failures into wisdom. Instead of letting his bankruptcy defeat him, he added it to his inventory of life obstacles, using it to grow, learn, and expand his understanding of the human experience. He did not wish that the bankruptcy had never happened. Instead, he actually wished that he had experienced bankruptcy earlier!

What can you learn from bankruptcy that will allow you to grow your capacity as a human being? Can you use it to become more compassionate? A better business person? A savvier investor?

When you make a choice to shift your thinking about your bankruptcy, you will likely extract a number of lessons that make you wiser and stronger in the years ahead. In fact, McGovern left behind a reputation as a wise man with a life committed to service.

“Take control. Burying your head in the sand never works.”

Singer Dionne Warwick led bankruptcy in 2013 after several consecutive years of tax troubles that resulted in a $7 million tax bill to the federal government and a $3 million tax bill to the State of California.

How does a person end up with a $10 million tax liability? It’s simple: Interest and penalties. Though Warwick said she eventually paid the original amount of the back taxes, the compounding interest and penalties become overbearing.

Perhaps the biggest lesson to learn from Warwick’s bankruptcy is this: Take control. Burying your head in the sand never works. In fact, if you are facing a financial di culty, and you simply ignore the problem, it will only worsen. You already know this: If you are late on a payment, for instance, and you fail to call the creditor and ask for an extension, the calls and collection e orts only intensify

If, on the other hand, you take control, you can likely find a more manageable solution.

Too often, people wait until the problem has spun out of control. They allow the bills to pile up, the taxes to go unpaid, and the fines and penalties to accrue.

And for what? They end up with years and years of financial troubles.

It usually looks something like this: You have a financial crisis, but you are naively optimistic. You think that somehow, somewhere, the money will come in, so you place your unpaid bills in a pile. When the money doesn’t come in, the pile gets higher and higher, until it looks unmanageable. Now, instead of feeling optimistic, you feel panic and anxiety, so you continue to ignore the pile.

Eventually, the pile looks like a mountain.

If this sounds familiar, take a lesson from Dionne Warwick. Instead of allowing one, three, or ve years to pass—take action, now. This might mean debt negotiation—a viable solution if you have a large chunk of money to settle unpaid bills. If you do not have a large chunk of money, it might mean that you consider bankruptcy, which will give you a chance to wipe the slate clean and start over.

The biggest differentiator that determines whether a person recovers financially is this: Intentionality. Those who recover take control, are proactive, and become masters of their nances.

“Sometimes, we are forced into bankruptcy not because we mismanaged money, but because life isn’t always fair or kind.”

The great advice-columnist Ann Landers once said, “Expect trouble as an inevitable part of life and repeat to yourself, the most comforting words of all; this, too, shall pass.”

This, too, shall pass.

Surely, Henry John Heinz must have muttered a similar sentiment to himself when he had to le for bankruptcy in 1875.

As background: Henry John Heinz was one of eight children born to immigrant parents. At the age of six, Heinz helped his mother in the garden. By the time he was nine, Heinz was making his own horseradish sauce. And by the time he was twelve, he was using a horse and cart to make deliveries.

His was a built-from-scratch story of hard work from an early age. When Heinz was just 25 years old, he and a friend started a company that sold horseradish, pickles, sauerkraut, and vinegar.

Then something went wrong. Heinz was obligated to pay for a crop, and the crop yielded much, much more harvest than anyone anticipated. The debt from this “bumper crop” overwhelmed the condiment company, and it was forced into bankruptcy in 1875.

This is the way life works: Sometimes, we are forced into bankruptcy not because we mismanaged money, but because life isn’t always fair or kind. Sometimes, the unexpected happens: A bumper crop yields too much harvest, a medical emergency leaves us financially strapped, or we lose our jobs due to a downturn in the economy.

Remember: This, too, shall pass. This is a bump in the road, but it is not the end of the road. Just as life has its inevitable obstacles, it also has its fair share of blessings. When you are feeling overwhelmed, take a moment to remind yourself of this. Everything is temporary.

After filing bankruptcy, Heinz immediately began a new company with his brother and a cousin, and together, they introduced a new condiment: tomato ketchup. Eventually, Heinz would buy out his brother and cousin and re-organize under the name, The H.J. Heinz Company, which in 2013 was purchased by Berkshire Hathaway and 3G Capital for $28 billion.

“You will not recover from bankruptcy; you will recover through bankruptcy.”

Henry Ford, the great entrepreneur responsible for Ford Motor Company, declared bankruptcy … twice.

Before finding Ford Motor Company, Henry Ford, along with financial backing from Detroit Mayor William Maybury, William H. Murphy, and Senator Thomas W. Palmer, founded the Detroit Automobile Company. What happened next is up for debate: His investors worried that Ford could not put a car on the market; Ford said that his investors were driven by pro t rather than innovation.

Regardless, Detroit Automobile Company went bankrupt in early 1901 after producing twenty vehicles at a cost of $86,000. (Adjusted for inflation, that’s about $2.5 million in 2017, or $125,000 per car.)

Again under Henry Ford’s leadership, the now-defunct Detroit Automobile Company reorganized as the Henry Ford Company in late 1901, not even a year later. But in 1903, it, too, was headed for bankruptcy.

A few months later, Ford founded Ford Motor Company, and third time proved to be a charm. Of course, Ford Motor Company was close to bankruptcy during the financial crisis of 2007-2008, but by 2017, it was exceeding Wall Street expectations.

Henry Ford’s story is one of perseverance. Ford did not allow his bankruptcies to deter him. Rather, they were vehicles (pardon the pun) that allowed him to continue making business decisions. Ford recognized that bankruptcy offered a second—and in his case, a third— chance, and he took hold of this opportunity.

Most people believe that bankruptcy represents rock bottom, but I disagree. I believe that bankruptcy is the vehicle that allows you to recover from rock bottom. If you are suffering from a financial meltdown, and you do not have a clear path out of the chaos, your financial situation will likely not improve in the coming years. You will face the constant pressure of having creditors breathing down your neck. You will worry about whether your utilities will be turned o for non-payment. You will cringe every time the phone rings.

When you declare bankruptcy, though, you get to make choices without this constant pressure. Your life feels easier because it is easier. Your responsibilities become more manageable.

Here is the truth: If your bills are piling up, and you have no way to pay them, bankruptcy might be the best vehicle available to you. It gives you a chance to wipe the slate clean and start over.

In other words, you will not recover from bankruptcy; you will recover through bankruptcy.

“Bankruptcy sounds bad, but in reality, people who have declared bankruptcy say that it was their lifeline.”

It’s hard to imagine how someone making as much money as Burt Reynolds could ever declare bankruptcy, so here is a story that might be more relatable.

In 1980, Cyndi Lauper was a struggling musician in a band called Blue Angel. The band’s first and only album was a giant op. Adding insult to injury, the band members had a falling out with their manager, and they red him. In turn, he sued them for $80,000.

Like most people, Lauper didn’t have $80,000 lying around, so in 1981, she had to declare bankruptcy. By working in retail stores and waitressing at IHOP, Lauper managed to get by, and in 1983, she released her first solo album, which was a worldwide hit and made its way to fourth on the charts.

The lesson to learn from Lauper’s bankruptcy is this: It matters not whether you are $8,000 in debt, $80,000 in debt, or $8 million in debt: If you cannot pay your bills, you cannot pay your bills. And the feeling that ensues is terrible.

If you are struggling with your nances, and you do not have a viable plan for resolving your debt, what is going to change the situation? Unless a pile of money falls from the sky, you will continue to struggle in the coming years, maybe even decades. As you get to stay afloat, that terrible feeling will continue to plague you, your financial situation will continue to erode, and as your debt grows, your credit score will shrink.

That feeling will not go away. Instead of being able to focus on the wonderful aspects of your life, you will spend your time worrying about money.

Bankruptcy sounds bad, but in reality, people who have declared bankruptcy say that it was their lifeline. When you start over and declare bankruptcy, that feeling in the pit of your stomach goes away. You can finally start saving money. You can pay your bills on time.

And you might just make it to fourth on the charts!

Getting into more debt than you can handle is a fairly common occurrence for people these days, and there is a light at the end of the tunnel even in the worst of situations. When your income is not sufficient enough to pay your debts in a timely and productive fashion, you have the option of filing for Chapter 7 bankruptcy. In the state of Alabama, the process is fairly straightforward and can even allow you to keep some of your property rather than relinquish it to pay your debts.

A Brief Introduction to Chapter 7

As mentioned above, Chapter 7 bankruptcy is appropriate for those who have too much debt for them to reasonably pay off. It takes an inventory of all of your income and assets, and for the most part completely rids you of the nagging debt you had. Some creditors are exempt from being satisfied during a Chapter 7 filing, including past due taxes and student loans, but overall you can start with a clean slate once your case has been completed.

Do I Have to Get Rid of Everything?

Many times during Chapter 7 bankruptcy you will be asked to give up your personal property in order to offset your debt. Items like your clothing or housewares aren’t included, but in some states your home or even your car can be taken.

In Alabama, there are specific stipulations that discuss what types of items are exempt during a Chapter 7 bankruptcy case. While the list is long and detailed, we are going to provide an overview of the types of items you’ll be able to keep:

• Your home and property, valued up to $15,000. The size of your property cannot exceed 160 acres.
• Disability and life insurance compensation.
• Personal items like family pictures, books, or a burial plot.
• A variety of pensions and retirement accounts.
• 75% of weekly net income; it can be more for certain low income individuals.
• Tools required to be kept by military personnel.
• Unemployment and worker’s compensation payments.
• An additional $7,500 in personal property of your choosing.

When the above property and payments are exempt, they are essentially protected during the bankruptcy process. You do not have to worry about any of these items being taken from you or sold to satisfy any of your creditors.

If you are considering filing for Chapter 7 bankruptcy and have questions regarding your property and what you’re allowed to keep, contact Bankruptcy Solutions today.

“Your bankruptcy is only one part of your life, and it is a crisis only if you allow it to be.”

Abraham Lincoln is best known for ending slavery in the United States, but what you might not knowis that prior to becoming the sixteenth President of the United States in 1861, he was co-owner of a general store. In the early 1830s, Lincoln and his partner purchased inventory for their store on credit, only to see dismal sales in return. When Lincoln’s partner died, Lincoln became liable for $1,000 in back payments, which is today’s equivalent of about $25,000.

Abraham Lincoln declared bankruptcy in 1833.

In those days, bankruptcy protection laws were not as strong as they are today, so Lincoln was required to surrender his only assets: a horse and some surveying gear. Beyond that, he was required to repay his creditors for the next seventeen years, a condition that would not exist under today’s bankruptcy laws.

Yet, we do not remember Lincoln for his financial failure. We remember him for paving the way to abolish slavery, for leading the United States through the Civil War, for helping preserve the Union, and for a 271-word speech delivered in Pennsylvania a little more than four months after Union armies defeated the Confederacy at the Battle of Gettysburg.

Here is what we can learn from President Lincoln’s bankruptcy: Your bankruptcy is only one part of your life, and it is a crisis only if you allow it to be. What you do after your bankruptcy is far, far more important than the facts of your bankruptcy. You can decide to allow your bankruptcy to de ne you, or you can decide to use it as an opportunity to live a full life.

Abraham Lincoln chose the latter. Nearly thirty years after declaring bankruptcy, he became President of the United States of America. His bankruptcy was a mere drop in the bucket.

(Keep in mind, too, that bankruptcy laws were much less forgiving during Lincoln’s time. If Lincoln had declared bankruptcy today, he likely would have been able to keep his horse and surveying gear, and, under a Chapter 13 bankruptcy, he would not have had to continue paying his loans for more than ve years post-bankruptcy.)