Pinocchio should have declared bankruptcy

Brad Perri is a Minnesota bankruptcy lawyer who will be guest blogging at Caveat Emptor from September 29th through October 10th.

I appear to be on a Walt Disney kick.

As with Ursula in The Little Mermaid, Pinocchio presents us with a situation in which a deal is made and then the merchant in the deal decides that part of the deal includes being able to do whatever they want to the buyer.

In the case of Pinocchio, recall that Pinocchio and his new-found buddies pay a visit to Pleasure Island. Pinocchio and his buddies basically go on a binge: billiards, drinking (root beer, I’m sure), and gambling.

But what happens when the good times stop rolling (ala, a recession/depression)? Well, Pinocchio and his buddies turn into donkeys and get made into slaves! Seems like a reasonable exchange, right?

What Pinocchio and his pals could have used was the Constitutional right of bankruptcy. Bankruptcy would have allowed Pinocchio’s gang to recognize that they were in over their heads and that unless they received a fresh start that their ability to enjoy life, liberty and the pursuit of happiness would be fundamentally compromised. Unfortunately, Pinocchio either didn’t know his legal rights or Pleasure Island didn’t observe the Bankruptcy Code and donkey-dom beckoned.

So don’t let your creditors turn you into a jackass. You have rights. To determine whether you can best protect your assets through bankruptcy or some other type of legal action, consult your family attorney.