How the Bankruptcy Double Standard Hurts Consumers
A recent article from The New Yorker highlights a troubling disparity in the way we view bankruptcy and loan restructuring in general in this country. As was evidenced in the recent bankruptcy filing of American Airlines, bankruptcy for corporate entities is generally considered part of an overall savvy approach to managing debts and investments.
While American could have continued paying its debts (it filed bankruptcy with more than $4 billion in the bank), it opted to take the bankruptcy route, which will allow it to restructure its debts into ones that make more financial sense. After the company filed its Chapter 11 bankruptcy petition, most analysts praised its decision, citing the success other airlines have had with reorganization bankruptcies in recent years.
For consumers interested in filing personal bankruptcy, though, the attitude of the general public is vastly different.
Bankruptcy as a Moral Issue
The current turmoil in the housing market highlights exactly how differently the general public views personal bankruptcy:
- The housing bubble falsely inflated housing prices.
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