With the average American family just about a month away from personal bankruptcy should anything go wrong in their lives (loss of job, illness, or unexpected expenses), it surprises me how many people are resistant and ashamed to file bankruptcy even when they really have no other choice.
Perhaps it should not surprise me since our society sends such mixed signals about debt. On the one hand, there is an entire media and corporate army promoting consumerism and the joys of going deeply into debt. On the other hand there is the United States Trustee's office which acts like there are many dishonest debtors when really there are few, but also: various credit counseling agencies as fronts for credit card companies, unscrupulous debt collectors, and credit unions (which are the worst places to do "banking") all spouting off about the evils of not paying back your debt and falsely telling people that they cannot or should not file.
So is it "bad" to file bankruptcy?
Of course not, if your financial situation is so distressing that you need to do so.
I am not advocating for people not to pay their debts. Our entire economy depends upon the proper functioning of our credit system. This means that most people should honestly pay their debts. It also means that some people need to get relief from their debt and get a fresh start. If not for this frest start afforded by bankruptcy, our credit system would be paralyzed by risk aversion. It is precisely because of the availability of bankruptcy that people are comfortable with taking on credit risk. It is credit that allows modern commerce to flow. Bankruptcy actually helps the economy and thats why we need it.
If you are looking to assign blame for people in bankruptcy, then don't just blame yourselves for your "lack of responsibility." There are plenty of other villians having responsibility for your financial situation. Predatory lenders are flourishing. Too much credit has been available to too many people who cannot afford it. Also, too many people are forced to use this credit in order to maintain their living expenses in the face of rising gas and food prices and stagnant wages. The appalling state of health care coverage in this country forces many people into bankruptcy with staggering medical bills. There is the scourge of gambling (and the excessive availability of casinos and lotteries) and other obsessive-compulsive behaviors. There are entire industries based upon fostering obsessive-compulsive behavior that forces many people into bankruptcy. It is not just casinos. There are alcohol addictions, prescription drug addictions, sex and porn addictions, and even shopping addictions, all creating huge profits for the corporations and banks. The current crisis state of mortgage lending and declining housing values, caused by greedy and unscrupulous lenders, will also put many people into bankruptcy.
Many Christians have expressed anguish over filing bankruptcy because they have been taught that paying your debt is a biblical principle. While this is true, many of the leaders who quote this ignore other biblical injunctions, such as prohibitions against interest, and the forgiveness of debts every seven years. See Leviticus 25 and Deuteronomy 15. The biblical forgiveness of debt did not have any "means tests" or other restrictions. The forgiveness of debt was absolute, unlike the current bankruptcy law. Also, under the Bible it occurred every seven years and not eight years as under the current law. This is because the supposedly Christian legislators who are responsible for the current law are more in obedience to the commands of Visa and Mastercard (and the banks behind them) than they are to biblical injunctions.
The Bible prohibits the charging of interest. See Exodus 22:25; Leviticus 25:35; and Deuteronomy 23:19-20. The Biblical use of the word "usury" corresponds to the modern day word "interest" and not excessive interest as the word is used today. In the Bible, it was a sin to charge money for lending money. One was supposed to be compassionate to the poor and lend money without interest. This is not only in the Old Testament. It was Jesus who admonished the money lenders and threw over their tables. It was Jesus who said: "But love your enemies and, do good, and lend, expecting nothing in return, and your reward will be great, and you will be sons of the Most High." Luke 6:34-35.
When you consider that most of my clients were paying or owed huge amounts of interest, at rates upwards of 30% for credit cards and payday loans with even higher rates, it seems odd to me that any person with this kind of debt would feel bad about filing bankruptcy. What choice do you have when you are forever sinking further into debt and you do not have enough money to put food on the table or gas in the car? The real sin is the interest being charged on these debts and just how easy the banks made it for them to go deeply into debt.
If you are ready to turn the tables on the money lenders, schedule a free initial telephone consultation with me. This is a 30-minute, no-obligation, respectful and confidential consultation. I will ask you questions and then advise you as to whether or not bankruptcy can help you or is advisable, which Chapter I recommend, whether I can take your case and how much it will cost for my fees and expenses, and if I cannot take your case I will refer you to someone else. You have nothing to lose to hear what I have to say.
