pdooma
Lv 7
pdooma asked in Politics & GovernmentPolitics · 7 years ago

When a person declares bankruptcy do they just die?

So why do people think that when a business declares bankruptcy they die?

Bankruptcy is a tool used by people and corporations to renegotiate and restructure debt. Why shouldn't GM and Chrysler have gone through the legal avenues available to them to restructure their debt and renegotiate contracts? It's not like they'd be going out of business.

Is this whole bankruptcy scare tactic by the Obama administration simply preying on people's ignorance?

Update:

""Here are the facts: if Mitt Romney had had his way and we'd let Detroit go bankrupt, GM and Chrysler would no longer be in business today. He would raise taxes on middle class families to pay for tax breaks for millionaires and billionaires," said Obama campaign spokeswoman Lis Smith."

http://news.yahoo.com/romney-says-obama-trying-foo...

12 Answers

Relevance
  • Alex
    Lv 7
    7 years ago
    Favorite Answer

    There are 2 kinds of bankruptcy, Chapter 11 and Chapter 7. Chapter 7 is liquidation and going out of business.

    GM and Chrysler DID GO BANKRUPT. It was just a pre-negotiated Chapter 11 bankruptcy so it would have less of an impact on operations. But the fact was, they needed financing, and the banking industry at the time was in worse shape than the auto industry. Without an infusion of cash, they likely wouldn't have had enough money to even keep operating through bankruptcy proceedings.

    • Login to reply the answers
  • Debra
    Lv 4
    4 years ago

    For financial and credit subject I was search for solutions at this site: LOANSVAULT.NET- RE How do i file for BANKRUPTCY??? My Mom is going to die!? Ok... here is my situation. I live with my parents but unfortunately My dad lost his job last year and hasnt been able to find another one. Because of his unemployment he has been un-able to pay the mortage. My mother is disabled and I am a college student. I dont really make enough money to be able to pay the mortgage. Anyhow, My dad has been paying a lawyer but I have No idea what the lawyer is up to. Anyhow, My dad is taking it very easy because he's the type of person to take things calmly but now the situation is getting worse. We got some foreclosure papers about 1 month ago stating that we have to go to court, but the lawyer told him that we didnt have to. My mom is diabetic and if our situation continues to go the way it is, we will end up without a home. I decided to step in and take some action. What exactly do we have to do to file for bankruptcy????? How much money does it take to file for bankruptcy?? I need to know all the details, where can I go? Please help me?? I dont want to lose my family, we will end up in the street or in a shelter. We have lived in this house for over 20 years. Thank you so much.

    • Login to reply the answers
  • Anonymous
    7 years ago

    No Banks or Financial Institutions were willing to step up and help manage GM/Chrysler through a normal Bankruptcy. That's why the Government stepped up and did it.

    Otherwise, GM/Chrysler would have gone through a Chapter 7 which is liquidation of assets. That process would have wiped out many in the Supply Chain of the Auto Industry across many States in America.

    • Login to reply the answers
  • ?
    Lv 4
    7 years ago

    I don't think that most people misunderstand bankruptcy to the extent you've described. Most people know that it's a means to allow them to get out of debt. However, most of the confusion surrounds how much of the debt is actually erased following a filing.

    • Login to reply the answers
  • How do you think about the answers? You can sign in to vote the answer.
  • Anonymous
    7 years ago

    The difference would have been - if Mitt Romney had let Detroit go bankrupt, he would've just had his buddies at Bain, etc. buy up the companies, disassemble them and ship them overseas.

    • Login to reply the answers
  • Anonymous
    7 years ago

    @ Shovel Ready - Lmao!

    I miss Michael Scott.

    But no, you just have ruined credit - but payments are broken down to where you can afford them.

    • Login to reply the answers
  • 7 years ago

    Bankruptcy includes liquidation sales.

    What happens to businesses that rely on these manufacturers? Taxis, rental car companies, etc. There would be massive inventory issues for companies if they had failed.

    • Login to reply the answers
  • 7 years ago

    Yes.

    Source(s): Monopoly
    • Login to reply the answers
  • Anonymous
    7 years ago

    Michael J. Scott on The Office just stood in the middle of the office and shouted, "I declare bankruptcy." That is all you have to do. Now he is off the show, so I guess you disappear after bankruptcy.

    • Login to reply the answers
  • Anonymous
    7 years ago

    Oh, gee, thanks for the irrelevant lesson on bankruptcy. What scare tactic? What the hell are you even ranting about?

    • Login to reply the answers
Still have questions? Get your answers by asking now.