Filing for bankruptcy is a difficult undertaking for many people. In this economy, however, many families are looking for any kind of debt relief. Although the bankruptcy process may be upsetting, there is hope after a bankruptcy is discharged. Designer Betsey Johnson discovered this after celebrating her first fashion show after bankruptcy during Fashion Week.
Johnson’s empire included retail stores, which were liquidated to pay off her creditors. The designer worked through her loss and cleaned up her finances. She also continued to work and created several new designs for her clothing label. After the bankruptcy was discharged, Johnson’s first show was a step toward restarting her business without debt.
According to reports, before the bankruptcy, the designer employed more than 350 people at 63 stores across the country. But with more than $4.1 million in debt and little cash, Johnson needed help. This included closing her stores and selling the Betsy Johnson brand.
Johnson did, however, manage to keep the design arm of the business, which allowed her to make a comeback at Fashion Week. The new designs are owned by the Steve Madden clothing company, which bought Johnson’s brand name; however, the clothing still carries the Betsey Johnson name.
Every person has the right to seek debt relief through bankruptcy; however, it should not be considered the end of the financial road. People like Johnson discover that bankruptcy is an ideal time to restructure, reinvent or simply restart the business or family financials. The goal is to shed the old credit card, car loan or medical debt and never return to such a financial position again.
Source: Wall Street Journal, “Betsey’s back from bankruptcy,” Jacqueline Palank, Sept. 13, 2012