When Bankruptcy is Ethically and Socially Responsible

by Anthony Williams 

Bankruptcy, the Back-up Plan

It may be ethically and socially irresponsible not to have a bankruptcy back-up plan. Bankruptcy is not what one may want to think about, and it can be an emotional strain if needed. But, bankruptcy sometimes becomes a necessity in certain cases. However, entrepreneurs should try not to incur extensive debt to avoid digging a hole to deep to climb out of. It is the moral duty of entrepreneurs to have a bankruptcy plan in case their venture runs into bad weather (Hisrich, Peters & Shepherd, 2010).

When Bankruptcy is the Responsible thing to do

For instance, a Chapter 11 bankruptcy filing will allow one to try and salvage one’s business. If one were able to recognize that one’s business was in trouble filing Chapter 11 will be the responsible thing to do. By proving to the courts that one could nurse one’s business back to health via a new business plan, reorganization and success can be realized.

Bankruptcy can be Ethically Correct

This is ethical because it do not leave creditors unpaid. So too, one is seeking to ethically take care of one’s responsibilities. As a matter of fact, one should not wait too long to file bankruptcy, as this will retard the process and may facilitate failure; and, could result in a Chapter 7 filing. All the same, bankruptcy should be a last resort (Hisrich, Peters & Shepherd).
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Reference

Hisrich, R. D., Peters, M. P., & Shepherd, D. A. (2010). Entrepreneurship (8^th ed.). McGraw-Hill/Irwin, Inc.,