In Pennsylvania and other states, a crippling money judgment against a company may result in the company deciding to file bankruptcy. In some instances, that may be done to delay the execution of the judgment pending appeal, and to allow for possible reorganization of other debts of the company. In some cases, a bankruptcy may be filed where multiple lawsuits or verdicts threaten to exceed the capacity of the company to pay, such as in the case of many simultaneous asbestos judgments.
Although bankruptcy is authorized by federal law, certain myths associated with this legal remedy continue to persist. The myths serve to perpetuate a negative stigma about bankruptcy in Pennsylvania and throughout the country; however, they are not based in reality. Unfortunately, the stigma will remain until consumers are better informed about the powerful features of bankruptcy that allow them to obtain fresh starts in their economic lives.