The Phoenix Has Risen

By James K. Ince

It is so hard to imagine that failure often leads to success. Chrysler Motors had not put out a great product in many years. By all standards, it was a slowly failing company. The models of cars it produced were poor, tired versions of past sellers. The Dodge Dart was synonymous with the K-Car boxes of the 1980s. Chrysler had tried to merge with Mercedes to protect its status as the third-largest car manufacturer in the world. It was not fortunate enough to see the panic that was happening down the road at Ford. Unlike the slow hemorrhage that Chrysler experienced, Ford was in a complete meltdown and in full panic. It began selling its bloated assets and car lines in hope of preventing its extinction. Chrysler had no similar fear. It just kept doing things the way it always had because the implosion was not as severe as that of Ford.

This is largely how many individuals function. They know that they are having issues with their credit cards. They see their neighbor in complete panic when they get served with that lawsuit or their house goes into foreclosure. That neighbor is forced to deal with the crisis. They, however, are like Chrysler and just hemorrhaging. They are the person making the minimum payments on their credit cards. They are not failed and yet they are not a success. They are in a special purgatory that can go on year after year as long as nothing goes wrong. Few of us are like Ford. Ford recognized the problem before it spiraled. Ford emerged quickly because of that recognition.

Chrysler kept making the minimum payments on its debt. It really needed to re-tool its line of cars. However, that would take money the company did not have because it was paying an overwhelming amount of its profits into debt service. Each new car takes millions of dollars in investment capital. Chrysler actually had designs on the board it wanted to pursue but could not because of its “credit card” debt. The average person really needs to fix up the house, put money in the bank for retirement, purchase another car to replace the worn-out vehicle. But they cannot because they are busy servicing their overwhelming credit card debt. They are just waiting for the rug to be pulled out from under them.

The rug suddenly was pulled out from under the Chrysler Corporation during the last recession. Mercedes no longer was willing to prop them up and so put Chrysler out on its own. Now, Chrysler was facing the same problem that Ford faced earlier. However, because Chrysler had ignored the warning signs, it now had no adjustments it could make. It now required more than 100 percent of the company’s income to service its debt. There was a real chance the company would shut down. Instead, it filed for bankruptcy to restructure. With the help of the bankruptcy court, Chrysler found a new partner and eliminated or restructured that serious mountain of debt.

What has happened since? According to a CNN Money article dated February 1, Chrysler made a profit of $183 million in 2011. It is forecast to make $1.5 billion dollars this year, and numbers are expected to increase each year for the foreseeable future. The company has had a 24 percent jump in sales! Why? It now had the ability to re-tool. The Dodge Dart is no longer a square, boxy car. It is now a “wow” car. If you have not seen it, go on the Internet and look at the new line of cars Chrysler is producing. By all standards, the phoenix has risen!

What about the individual in the same position? That depends on the individual. Success stories with individuals are almost as dramatic. By stripping off the debt, they are able to afford the house, car and maybe even some nice evenings with their families going to the movies or occasionally out to dinner. Isn’t it time for your phoenix to rise? Isn’t it time for you to have the control over your life that you need? If you are in a situation in which bankruptcy appears to be the best option, come see us about your finances. We have experienced bankruptcy attorneys who will help you through whatever situation life has dealt to you.

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