I came across a radio show that would be of interest to anyone contemplating bankruptcy on the American Radio Works.
You may either listen to it on your computer, download it to your MP3 player, or read the transcript.
While the report appears to be balanced, I must take issue with one quote from Law Professor Todd Zywicki who states:
People just don’t feel as badly about filing bankruptcy as they did in the past, and as a result it’s become more socially acceptable and more people have file bankruptcy. [sic]
I have no idea what “people” Professor Zywicki is referring to. I have yet to meet a debtor who actually wants to meet me. Sure, I might be fairly personable, have a good sense of humor and like the Red Sox just as much as the next guy, but I think if most people felt they had a choice in the matter, they would rather discuss gum disease with their dentist than to meet with me to discuss the prospect of filing for bankruptcy protection. Moreover, I am consistently asked “…is my bankruptcy going to appear in the newspaper?” If it were so socially acceptable, I would think that people would be itching to get their bankruptcies publicized.
Alternatively, I could just give out t-shirts to my clients that read: “Hey! Look at me! I’m bankrupt and more socially acceptable than ever!”
That’s not the only gem Professor Zywicki shares:
When we borrow money we make a promise. And I believe that we should live up to our promises to the extent we can. If we can’t for reasons beyond our control then a just, charitable society lets us up and gives us a second chance. But if it’s just a matter of convenience, if it’s just a matter of trying to live beyond our means, then I take a very different view of that.
While I understand that Zywicki is a law professor, and the study of law is very different than the study of just about everything else, he misses an important economic and sociological compenent. The fact is our American society not only emphasizes that people can and should live beyond their means, but in many cases, Americans must live beyond their means to maintain a standard of living. Lets take – just as an example – the federal government which recently raised its debt ceiling to almost $9 trillion. Trillion, with a “t”. “T” is also the same letter that is used the the word “trouble.” With that line of credit, it sort of makes me wonder: “what’s in their wallet?” (and it unfortunately puts another song in my head: Music Man’s “well, ya got trouble my friends….”).
If the average bankruptcy debtor was a retail clerk driving a luxury sedan living in a gated community in a home where every room has a plasma TV and the latest gizmo, I could see his point. But if our own leaders cannot get their financial house in order is it really any surprise that the average American struggles to do so?
The majority of folks in bankruptcy are there because they found themselves trying to “live up to their promises,” but got pushed back by obscenely high credit card rates…or by events in life that were beyond their control. Many of the people I have represented have been forced to pay for groceries and prescriptions with credit cards because available cash had to go towards minimum payments.
Others lost jobs, have gone through divorce, or have had some serious health issue in the family. And others managed to forget paying their electric bill one month and found their interest rates on credit cards jumping because of a nifty universal default clause. Yet if we were discussing instead a loan shark standing on a street corner with a wad of fifties in one hand and a baseball bat in the other, I cannot help but wonder if Zywicki would still focus his attention on the borrower.
Reportedly, Zywicki wants to bring the “social stigma” of bankruptcy “back.” I have news for the good Professor: you cannot bring something back that never went away. Instead of resorting to indignation, let’s see what we can do about getting Washington to focus on the real issues that are getting people into the financial messes that force them to see me, rather than their dentist.
Related posts:
- Social Networking Sites and Bankruptcy: The Intersection is Dead Ahead
- Lipstick on a Pig
- Storm Preparation: Acceptance
- Facing Bankruptcy with Nagging Regret
- Honesty and Bankruptcy, Part II: Feeling Dishonest
Tags: Bankruptcy
If I could I would rather hurt myself than meet you…would gladly give my credit card bankers an arm to forgive my debt, so I won’t loose my security clearance. Look, I even wrote to the Honorable Barney Frank for help to fight these folks, how was I supposed to know they can raise rates and minimum payments any time they wish and they did, where is the law when I lost my employment three times in the past thirteen years, where was the law when I had to take a forced relocation with two kids and a third on the way and maintian two abodes while selling one.
I am sorry I have to vent, I have too much pride and honesty to declare the “B” and would rather be recalled to a one way mission to Afgan or Iraq than to face you. Yes, we talked once on the cell phone over the summer, I have improved my situation some and took your advice, even counseling at Money mangement International twice…but the last round of mailings from BofA will certainly be a Sunami for all of our efforts. Just pray for that miracle, what can I possibly explain to DoD to hold onto my clearance..that I have failed in my private life so continue to trust me with your clearance ?
http://www.rjhresearch.com/ADR/index.htm
Very Respectfully,
Matt
Matt,
First, thanks for commenting…discussing this stuff is tough. But with the economy the way it is, I think it’s important to get it out there – which is among the reasons why I started this blog.
Let’s step back a bit: what exactly did you do wrong here? You used your cards to help you through difficult times, and your credit card company decided it would be cool to raise rates and make it nearly impossible for you to get out of debt. Did you borrow the money knowing you could never pay it back? I’m willing to bet dollars to donuts that that wasn’t the case. I am willing to bet that you’re like many Americans who are finding that things are not going the way they hoped or planned… which is made even worse when the credit card company opts to move the goal posts by hiking interest rates or cutting credit lines.
When it comes to meeting me (and we have not met yet), all you’re doing is getting information. Our meeting is not a public forum – and no one knows about it. It’s all confidential. I listen to you, I get the facts you give me, I pay out your options, I give you my recommendations if you want it, and then you take some time to decide. I think the only thing that’s really painful is how you’re beating yourself up for being in circumstances that you did not plan, and now cannot control. It sounds like you’re exploring every non-bankruptcy option out there (like credit counseling), but if it’s not working, and it’s making the quality of your life terrible, it may be a good idea to consider a new strategy….something other than a miracle.
As for your security clearance concerns, I’m going to blog about it later today – so keep an eye out. Perhaps it will give you and other readers some food for thought.
-Bill