The financial crisis has taken a toll on many Americans as well as many companies, large and small. Sometimes, as in the case of Kodak, which recently filed for bankruptcy protection, employees pensions or retirement accounts might be tightly linked or invested in that companies stock or performance. When a company files bankruptcy, it is likely their stock will drop significantly.
If this drop in stock price results in lowering an employee's personal retirement account, that person may be faced with financial hardship as they work to regain their retirement and protect themselves from further loss of income. A personal bankruptcy might be one way to get a new start in place of a financial situation that involves out of control debt.
People often trust that their investments are wisely invested in relatively safe stocks. It is also not unreasonable to have trust in the company that you work for. However, when financial situations get tough for companies, they first try to preserve their existence, and then worry about employees and benefits. This means employees can sometimes take the brunt of the financial blow suffered by a company.
Sometimes financial hardship comes out of no fault of one person, but it can significantly affect one person and leave others unscathed. A person could be managing their debt fine one day, and the next day they lose all of their retirement, making their once manageable debt situation now a heavy burden. Personal bankruptcy might be one way to help put a person's debt behind them and set them on a new financial path.
Source: The Rochester Democrat and Chronicle