Tareq and Michaele Salahi, the now infamous “White House party crashers” apparently filed Chapter 7 bankruptcy early in 2009 with $335,000 in assets and $965,000 in liabilities after their vineyard company, Oasis Enterprises went downhill. The Salahis reportedly had $81,000 in credit card debt and several lawsuits against them for everything from non-payment on credit card fees to failing to pay their gardener. Some pundits following their story have pointed to the Salahis’ bankruptcy filing as proof that they are somehow dishonest or that they were looking for a “quick buck” via a reality show or the ability to sell their story to tabloids.
However, I must disagree. While I don’t know the intentions of the Salahis, I do know that many ordinary small business owners file bankruptcy everyday because they must do so if they want to survive financially. Small businesses get hit the hardest during a recession and many of them use credit cards as a matter of course in their everyday business operations; but especially during a recession when revenue may drop significantly. Those business owners who use credit cards or other forms of credit to “float” their business during tumultuous times are doing so in good faith and they only file bankruptcy as a last ditch effort to save their business or even to stop their own personal financial boat from sinking. It would be extremely unfortunate if the Salahis’ bankruptcy was used as “evidence” against them in determining their fate. After all, it was bankruptcy that saved the many banks, automakers and other companies during this recession.