The question of morality in bankruptcy

[Logan]

It's a business decision.

[kartoons19]

I agree with what everyone has said. I struggled with the issue myself, but realized it would take decades to pay them back and that doesn't even count student loans! This mess started when I was laid off of a full-time job because the company went under and I couldn't collect unemployment since I was a contractor. Unfortunately, I only had about three months of savings, which was not nearly enough. So while I was upset, to say the least, about the situation, I never questioned the morality of the company because they filed bk, I just looked at it as a business decision. So why should I judge myself differently? It's not wrong to get a fresh start. It is what you do with that fresh start that matters. Good luck to you.

[mijd]

To me it's not a question of morality, it is a matter of personal responsibility. This is the way I was raised. I can see many other posters here who have the same views. This is for me why there was so much guilt at having to stop making payments on my debt. And until recently bk has always been looked down on. Some other prople I know who are financially struggling to pay their bills and don't personally use bk see me as taking the easy way out. I've had this said to me many times. In my town filing bk rates your name and total debt being published in the local newspaper. I can't imagine the purpose of that!

Just as the adage says, if you can't afford it buy it with credit. Many of us can't and rightly so predict unemployment or disability but how many of us actually think about the future and what may happen at the point we buy something on credit. I remember applying for a home improvement credit card and being upset my initial CL was only 2K. That wasn't enough to buy the kitchen cabinets I wanted, so I settled for a less expensive brand. I made my payments on time, watched my CL go up and started thinking about buying things with the "no payments no interest" for xx months option being offered. My mother looked at my statement and asked me questions I never asked myself. Can I budget enough each month to pay the balance off in a year or will I be stuck paying accured interest at 22% apr. She knew the answer before asking me the question.
Many of us can complain about rising interest rates on existing balances and lowered CL's and rightly so. Maybe we should think first about what we are buying on credit and if it is really necessary.
I'm thankful for BK but now have to figure out if I will ever be able to retire as I have to start over in my 50's. I know two things for sure, I never take my good health for granted and will never fall into the debt trap again.

[onthefence]

I know two things for sure, I never take my good health for granted and will never fall into the debt trap again.

Amen to that!

[andy158]

I'm thankful for BK but now have to figure out if I will ever be able to retire as I have to start over in my 50's. I know two things for sure, I never take my good health for granted and will never fall into the debt trap again.

I thank God my 401k stayed intact (well somewhat intact) before going into our bk13. I knew if we didn't file there would never be a chance to retire. I just turned 50 and may still work til death if the bumps in the road become potholes. I look in envy to some of my co workers that are triple dipping (i.e. pension form past jobs, working full time and collecting ss) all while being in good health. I'm not that greedy. Retiring completely though may become a past practice for the middle class.

[chrisdfw]

Retiring completely though may become a past practice for the middle class.

Consider it a blip in the timeline of human history. There aren't enough resources to support people who could
be productive for half their life. It may have been a past practice, but only the recent past.

[ramirezhenry]

I think that should be the least of your concern now. You could get up from where you left off once you have fix your finances. You could go to your creditors and pay them up and I am sure they would take back whatever issue of morality they have about you and your business.

[blockhead]

I think that should be the least of your concern now. You could get up from where you left off once you have fix your finances. You could go to your creditors and pay them up and I am sure they would take back whatever issue of morality they have about you and your business.

Not sure what you mean. Care to elucidate?

[Tman]

I wonder why the issue of bankruptcy brings up such deep moral revulsions, yet divorces happen everyday, and nobody really gives a damn. Yes the divorce can be traumatic to the participants, but even they usually see it something that must be done. The real source of most of the trauma in a divorce (aside from children if any) is usually the division of assets. A promise to pay a credit card to some impersonal faceless corporation is not anywhere near the commitment that a couple make to each other as individuals when they get married. Yet it seems we individually and as a society are more concerned with a bankruptcy than with a divorce. I guess the big banks have conditioned most of us to view the business decision to use credit as some sort of act of morality even greater than that of marriage

[tobee43]

Here are some perspectives

http://methnerlaw.com/2009/09/17/morality-and-bankruptcy-is-paying-bills-the-definition-of-a-hero/

http://methnerlaw.com/2009/06/11/the-unforeseen-event-the-turkey-and-thanksgiving-you-and-bankruptcy/

http://methnerlaw.com/2009/03/22/sun...-and-creditor/

i think we have all debated with ourselves on this issue to no end. the guilt associated with this situation is not be taken lightly, however, it to me, is actually a good indication of who one is morally... because, it clearly shows the actual truth in your heart. it's why you have these feelings.

the above links words some of these feelings and conflicts we all internally go through quite eloquently. take the time to view them.

[discouraged]

Great articles, tobee. I just wish (in hindsight) that I'd not cashed everything in to try pay the bills, trying to forestall what is now happening. It never occurred to me this 'recession' would go on so long.

[tobee43]

hhm took the time to post those great articles and i know if i were at your time and place they most certainly would have helped me...


i hear you discouraged that's why hindsight is always 20/20 and actually i do agree it's really more "blind" than 20/20.....we would have cashed out and mattress stuffed...LOL!!! no not us...we took 40 years of savings and paid whom we could with every last dime we had until we lost our home after 33 years...our jobs...got sick...used up all our health insurance owed over 200k worth of medical expenses.....and i STILL felt guilt and shame....

i actually beginning to get over it...and believe me, time may not really heal all wounds...however, it does cushion the blows. promise.

[redhunter]

All creditors lend to debtors with full knowledge of bankruptcy laws just as if the bankruptcy rules were written into your loan agreement. Filing bankruptcy is a matter of exercising those loan terms. It is a business decision as has been mentioned many times before. That doesn't mean the decision should be taken lightly and it doesn't make it easier. But it isn't immoral to exercise a legal option.

[tobee43]

All creditors lend to debtors with full knowledge of bankruptcy laws just as if the bankruptcy rules were written into your loan agreement. Filing bankruptcy is a matter of exercising those loan terms. It is a business decision as has been mentioned many times before. That doesn't mean the decision should be taken lightly and it doesn't make it easier. But it isn't immoral to exercise a legal option.

so very true!

[msm859]

I wonder why the issue of bankruptcy brings up such deep moral revulsions, yet divorces happen everyday, and nobody really gives a damn. Yes the divorce can be traumatic to the participants, but even they usually see it something that must be done. The real source of most of the trauma in a divorce (aside from children if any) is usually the division of assets. A promise to pay a credit card to some impersonal faceless corporation is not anywhere near the commitment that a couple make to each other as individuals when they get married. Yet it seems we individually and as a society are more concerned with a bankruptcy than with a divorce. I guess the big banks have conditioned most of us to view the business decision to use credit as some sort of act of morality even greater than that of marriage

Good analogy. We are now also being brainwashed to be obsessed with our FICO scores. Bankruptcy is and should be a business decision.