Call Us Now

Clickdesk Code

Rich Dad Poor Dad Bankruptcy Protection

The man behind the success of the Rich Dad Poor Dad book series is filing for bankruptcy. (You can read more details here: Rich Dad, Poor Dad, Bankrupt Dad?) This is yet another case of a wealthy individual who is strategically taking advantage of his rights under the bankruptcy code and bankruptcy protection. Robert Kiyosaki is famous for co-writing the Rich Dad Poor Dad book series that inspired many to build asset wealth and create cash flow positive assets. Kiyosaki held private speaking events and his organization even had courses you could take to learn more about his wealth programs. He advised on more than just how to become rich. He also wrote about how to manage retirement. Some would find his bankruptcy filing to be surprising, but from a business perspective, Kiyosaki is making a strategic move that would protect his remaining assets left in his company called Rich Global. It is not uncommon for powerful business people to use their rights under bankruptcy protection to protect themselves from business debt. We’ve seen the same thing done by former Dodger’s owner, Frank McCourt, and Donald Trump has also used bankruptcy protection to his advantage multiple times.

Bankruptcy protection allows the bankruptcy court to discharge debt that cannot be repaid due to the current financial situation. Savvy business people like Kiyosaki know that discharging debt under bankruptcy is beneficial to his compan. Rather than spending the next 10 to 20 years paying back all of the debt, he is looking to get the debt discharged in bankruptcy. Business people will sometimes risk their business by leveraging debt in order to capitalize on the financing or credit they receive. In a high risk situation, if the business plan does not execute as expected, the business may be in danger of defaulting on their debt. Rather than deal with law suits and litigation, bankruptcy is used as a tool to get out of the debt via discharge in bankruptcy.

If you borrowed money to buy investment property, or if you took out a second loan (HELOC) to improve your home as an investment, you took a business risk to do so. Your plan may have been to increase the value of your home with the improvements you made, or it may have been to buy an income property to profit from equity gains in the years to come. Unfortunately, the recent real estate crash may have derailed your investment plan and left you with real estate debt that is negatively impacting your cash flow and equity situation. This is not much different than what some successful business people get into when they take business risk, except that business people are accustomed to using legal tools to cut their losses and get their financial situation under control as fast as possible. Even a guy who is known for teaching how to create wealth is willing to use bankruptcy to protect his business. You may see yourself as an average earner or normal type of investor, but you made business decisions to capitalize on the credit extended to you just like any business people would do. Consider the actions of business people and take the perspective of a business leader when you consider bankruptcy as an option for yourself.

If you would like to schedule an appointment to learn more about bankruptcy services, you can reach Bankruptcy Law Professionals at (855) 257-7671 to schedule an appointment at our Riverside or Orange County locations.

Written by