I’m a big fan of personal responsibility. If you’ve promised to do something, you should do it. With that said, it seems odd to some people that I don’t have an ethical problem with bankruptcy. For some people, it is the only option after a long series of problems.
Don’t get me wrong, it should be a shameful decision. Reneging on your word should never be a source of pride. It should be a difficult decision to make. A couple of years ago, I came very close to making that decision myself.
It should not be a reason to celebrate and it should absolutely not be a reason to behave irresponsibly. Some people don’t see a need to take care of their responsibilities because, when it gets bad, they’ll be able to file bankruptcy and make the creditors go away. They are abusing a safety net. That abuse hurts everyone. Credit card companies have to charge higher interest rates so the paying customers can cover the risk of those who default or file bankruptcy.
There is one prominent local bankruptcy attorney who files every 10 years, and has filed consistently for decades. He runs a thriving practice, so it’s not a matter of poor choices, it’s a matter of deliberately living beyond his means and screwing his creditors. He’s one of the slime-balls that give lawyers a bad name. He is one of the many who abuse a lifeline designed to save people from a life of destitution they didn’t ask for, and he does it to finance his extravagant lifestyle.
If you have found yourself buried in a debt you didn’t plan for, if life threw you a curve-ball that you are entirely unable to deal with, if you have to file bankruptcy, it’s okay. Really. When you go in front of the judge, have the decency not to enjoy it, and try to learn from the experience.
I know of a lot of people in our small town that have filed bankruptcy in the past, some multiple times.
My MIL is the perfect example of someone who should file bankruptcy but hasn’t. She was a single mother who worked day & night for years to support her family and used credit cards to help pay for extra activities for her son like Scouts & Football, but not for frivolous stuff for herself. She then had a heart attack & was out of work for a long time. Had to pull out all of her 401k just to live on. Then had a heart transplant, & two bouts with cancer. She is still alive & kicking but she struggles to pay on her credit cards every month, living off her little disability check. I would not hold it against her if she filed bankruptcy, but she was raised that it was not right. Her values prevent her from doing it as she views it as stealing. I respect her for that.
Her daughter, on the other hand, planned on filing bankruptcy & went on a big shopping trip beforehand even purchasing a new computer, which she knew she was not going to pay for…that IS stealing in my opinion.
I was raised by a Father who absolutely despised people who would file for bankruptcy because he had with one such dishonest person back when he was a young adult. He had worked all summer for this guy, the guy never paid him, and then the guy filed bankruptcy. My Dad got screwed. I am sure he learned a good lesson from that incident too.
So it was NEVER an option that I would ever entertain. However we did get into debt over our heads…not enormous amounts but much more than we could afford at the time. Some was due to valid reasons, but I am sure that our lack of money management skills didn’t help either. There were several unsecured debts that we just stopped paying on because we didn’t have enough money coming in to pay all the monthly minimums. And once you miss a payment then there are extra fees, etc, and it all snowballs to the point that we had no idea what we were going to do to get back on track.
Well I have found that the creditors will work with you most times. And we have gotten settlement offers that we have paid with our tax refunds or extra money when we can to finally pay these old debts off as we can.
Yes we have collectors calling all the time, but with caller id it is not too much of a hassle — I just let them leave a message. But it is a constant reminder of those 3 accounts that we still need to take care of. I am not proud of how we have had to handle our debts, but I am proud that we have or will eventually take care of all of these without filing bankruptcy.
We have learned to manage our money & be frugal. Because we have crappy credit we have learned to live on a cash basis which makes us manage better. We have a totally different outlook now…we have learned a lot from it all. And I hope to teach my children how to be responsible & manage their money better so they are never in a situation where they are over their heads in debt. It is NOT a good feeling!
So long as there is moral hazard, there will always be bankruptcy!
If you have no other choice, people should use their lifeline. However, something really needs to be done to slimballs who abuse the system. Incredible.
I’d love to see the law changed to allow one bankruptcy per lifetime. File banko, make the debt go away, and leave with a sternly worded “Don’t you dare come back here!”