One of the latest victims is a proud family-owned construction company that for ten years was building high-end homes in the state of Florida. Smith Family Homes, of Tampa, was founded in 1998 when Ron Smith, originally an executive with a national builder, went independent a decade ago and founded Smith Family Homes with his sons. For ten years the proud company specialized in building high-end homes in some of the region's premiere neighborhoods. Smith Family Homes quickly developed a reputation for quality workmanship, and many of their homes sold for upwards of $500,000.
But then the credit crunch hit and Smith Family Homes, like so many other companies, was caught in the noose of being stuck holding lots and finished homes worth far less on the failing markets than was owed to the bank. It has been reported that a last-minute deal with an investor to infuse more cash into the business fizzled, leaving the company no choice but to file for Chapter 7 bankruptcy. Debts were listed as being anywhere from $10 million, to $50 million.Smith Family Homes is the latest victim of a worsening economy that has claimed such respected Tampa stalwarts as Nohl Crest Homes and SimDag LLC, well-known developer of Trump Tower in Tampa.
And it also serves as an example of just how serious the economic fortunes of previously successful and respected individuals have turned sour in record time—leaving corporations, as well as individuals little choice but to file for bankruptcy.
However, for anyone consumed with guilt over the perceived stigma of having to take the bankruptcy route, need only reflect on the conditions that caused the mess we find ourselves in. Money was so easy to borrow. Banks and lending institutions were falling all over themselves advancing funds to both individuals, and corporations in an effort to increase cash flow and grow the inevitable fees that are the ultimate costs of loans for renovations, or to buy that bigger house.
At the end of the day, the banks and lending institutions were lending money to individuals who, common sense would suggest, did not have the means to properly carry the loan, with little or no contingency or wiggle room in the event markets, or the economy went in the dumper.
Which is exactly what happened, leaving both individuals and corporations little choice but to turn to the nation's bankruptcy laws in an effort to manage bankruptcy debt.
And no one wants to resort to bankruptcy. It's hard, it can be costly and it could take years for an individual to recover financially, and start over.
However, often you have little choice—and either there is no alternative available to you, or the alternative is less than palatable. And that alternative is to somehow manage to navigate your way through the debt and somehow survive under the mountain that it has become.
The saddest part of all is that you might be passing that debt along to your kids. Many debts, and contracts have provisions that make heirs liable for debt if the principle is no longer in a position to bear responsibility for it.
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It is a sad truism that many, many respected corporations and individuals are turning to the nation's bankruptcy laws for protection, or resolution of their situation. Like you, they've done everything right. Like you, they've worked hard and played fair.
But others, the ultimate architects of the nation's credit and economic woes, didn't play fair—leaving you little choice but to seek bankruptcy.
If that's the road you need to take, prepare for the process with a qualified bankruptcy attorney. Grit your teeth and dig in, but don't forget to hold your head high, for you have nothing to feel guilty about.