It seems that banks are at it again. Better put, maybe they never stopped. Personal bankruptcy is usually a devastating experience for an individual, emotionally and financially. But there is at least one benefit: your debts are discharged. Now, in practice and in effect, that may not always be the case.
If you’re Donald Trump you have found a way to make millions off of bankruptcy. This is because his bankruptcies have been of the corporate type. But the result is the same as a personal bankruptcy in the sense that debts are not fully paid back and are, in theory, discharged. But that’s pretty much where the similarity ends. This is a most telling example of why there is such massive income inequality in this country. One class of individual resorts to bankruptcy as a last resort, having lost pretty much everything. Another class of individual, the millionaire (billionaire?) investor, leverages bankruptcy to eliminate debt in order to increase corporate value and/or profit. Funny how that works.