Insight: Protect your financial stability — a courageous decision
Attorney Zelma Dávila argues that bankruptcy, when used responsibly, can help Puerto Ricans protect assets, reduce stress and rebuild financial security.
Financial stability is one of the most fragile pillars of modern life. I have seen it firsthand throughout my career as a bankruptcy attorney and financial transformation strategist, and I also recognize it in everyday conversations: Few things cause as much fear as the possibility of losing everything. That is why it is important to talk about an alternative that, far from being a failure, can represent the first step toward a more structured and stable life: bankruptcy.
In Puerto Rico, we are facing a complex economic environment. The cost of living continues to rise, tariff increases are anticipated, and many families are burdened by debts growing faster than their incomes. For this reason, now more than ever, educating ourselves about the available legal tools is an act of both responsibility and courage.
Each year, after the close of the tax filing season, individuals come to my office and realize, while preparing their returns, that their financial situation is far more serious than they had imagined. It is at that moment that I remind them of something essential: bankruptcy is not the end of the road. It can become a legal way to reorganize debts, protect assets, and, above all, regain peace of mind.
I have guided many clients who, through Chapter 13 of the Bankruptcy Code, were able to establish realistic payment plans that allowed them to save their homes, keep their vehicles and fulfill obligations such as child support. This option is available for those who, despite serious payment delays, still have a stable income. Reorganizing under judicial supervision offers them the opportunity to move forward in a structured manner.
I have also witnessed how Chapter 7 bankruptcy has been a real solution for those who, after a detailed analysis of their income and expenses, lack the ability to repay their debts. This process allows for the discharge of unmanageable debts and a fresh start. It is not granted automatically: it requires meeting clear criteria and undergoing a rigorous process. That is why seeking early and reliable legal guidance makes a significant difference.
I know that the word “bankruptcy” alone generates fear. For years, it has been wrongly associated with moral or personal failure. However, reaching the point of seeking protection under the Bankruptcy Code is not an act of surrender; it is an act of courage and responsibility.
Today, more than ever, we have access to financial education tools. Knowing and using the legal resources available to us does not make us weak. Properly understood and managed, bankruptcy is a second chance. It is not a mark of defeat, but a real opportunity to get back up and reorganize.
More importantly, we must normalize conversations about financial alternatives without fear or shame. Sometimes, filing for bankruptcy is the bravest decision we can make to protect our future and rebuild our lives with dignity.
Author Zelma Dávila is an attorney with more than 20 years of experience specializing in financial transformation and bankruptcy filings. She provides legal strategies to help individuals and businesses in Puerto Rico reorganize and regain financial stability.
