If Blockbuster Is In Trouble, What Are My Chances?

By James K. Ince

According to the March 24, 2010, article posted at CNNMoney.com, Blockbuster is more than $1 billion in debt and is sinking fast. While the company has done everything in its power to shift around its finances, it may still be overcome by factors beyond its control. Among those are changes in technology. The only escape will likely be a bankruptcy filing to help the company start over again.

When most people read something like that article on CNNMoney.com, they can objectively look at the situation and realize that Blockbuster is facing a situation largely beyond its control. The whole world has changed so dramatically with the invention of the iPhone and online movies. Fewer people want or need the neighborhood video store. Most people realize that there is little that Blockbuster will be able to do without seeking the help of the bankruptcy court. However, many of those same people will beat themselves up when looking at their own finances.

For individuals who are in trouble, it is often also a situation beyond their control. Perhaps, they have trained and become proficient in a line of work that has been stable for 50 years and then, suddenly, a recession hits their company and they are out of work. Or worse, they have a sudden illness or a family member has had an illness that has either cut into their salary or caused them to accrue mountains of hospital and doctor bills. Possibly, they have been served with a divorce or have struggled trying to live on one income since a divorce.

Whatever the case, these situations are not much different than in Blockbuster’s case. The one big difference is that companies do not beat themselves up when they need to seek the help of the bankruptcy court. Unlike you, Blockbuster will arrive at a decision about whether to file for bankruptcy based on nonemotional, business considerations. If the company files, it will not feel guilty and will not see itself as any type of failure.

An individual should never seek the protection of the courts as a first resort. First, ask yourself some simple questions:

  • If I continue to pay the minimum payments I am making, will I be out of debt in five years?
  • Do I spend almost all of my waking hours (and many of my sleeping hours) attempting to figure out a way to pay my bills?
  • Do I borrow back and forth on my credit cards to “float the debt” in the hopes that I can pay off at least some of the debt?
  • Am I at the point where I cannot sleep?
  • Is my health impacted?
  • Is my marriage suffering?
  • Have I turned into a big grump with my friends and family?
  • Am I starting to get behind on my car and house payments?
  • Have I been sued or am I afraid I will be sued?
  • Have I been turned down for credit because my debt/income ratio is so far out of whack?
  • Have I attempted to work with my creditors only to receive insults and threats in return?

If any of these questions are answered with a yes, maybe you should approach your situation the way some of the larger companies approach theirs. Sit down and do the math. Can you ever escape?

Still not certain what to do? The best approach is to come to our office for a no-obligation FREE consultation. It may be that bankruptcy is not a good option. You won’t know until you ask. We are trained to deal with these situations. We understand the pain and suffering you are going through, and we know you don’t want to even consider bankruptcy. Life dealt you these cards. How you play them is the key. Bankruptcy is a way to start over and start fresh.

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