What about honor?

[JackBondLove]

Michael Kinsley has a great editorial about how the US government should not default because of the basic idea of ... honor. I wonder, how have you all reconciled your decision to NOT honor your debts with this idea of honor?

As for myself, since I am extraordinarily cynical (especially w/r/t macroscopic entities), the term "honorable" is replaced with the term "legal", and I give it no further thought. With this sort of thinking, the default of the US government is not a matter of honor, but rather, how does this affect the financial situation of the US going forward - i.e., very similar to the calculus I employed in deciding to do my strategic default (I say strategic, because I did have the option of liquidating my 401K and not buying a house on the eve of BK, but chose not to as I had decided that it would not have been a prudent financial move.)

http://www.businessweek.com/magazine/the-debt-debate-what-about-honor-07212011.html

[sunshinepa]

Well, I reconciled my decision as follows: I made every attempt to get my CC payments lowered. Never carried a balance above 1000.00 on six cards in almost 30 years. Paid thousands of dollars over those years, when circumstances over a 2 yr period caused some major debt, and I needed some help, they flat out refused to work with me for even small time frane. I never paid a bill late in my life, so was I honorable, heck yeah! They took gov't money, got legislation that allowed them to raise rates/minimum payments, cut limits when people were out of work and needed the credit to survive and screwed them with their tactics.

In the beginning, I felt horrible. Then I made a business decision, just like they did when they decided to screw folks. Where was the CCC's honor when those big banks took the taxpayers money?????

Incidently, I will continue to honor my mortgage debt even though I did not reaffirm.

[espo1357]

You nailed it when you replaced "honor" with "legal".

In our watered down culture, there is little "honor" left because people don't give a crap about it. Lawyers do it all the time, take the "legal" way out of things, because that is what the state determines to be ok.

Personally, where was the "honor" when I lost 60 percent value of my home in less than 2 years because others and banks lied?

Or where was the "honor" after I got downsized for the third time in ten years, despite high productivity?

Its a messed up world, and unless you know your rights and understand the law, you will be left behind and your life will be a mess.

I always thought expanding my awareness to the world around me was one of my gifts, and filing for BK was the smartest life decision that I have ever made.

[donnao]

I totally agree with you, who cared about us little people, who, basically supports this country. Do what you have to do, that's their motto, isn't it, so shall we!

[diychapter7]

Thanks for posting the article link. I never really used the word "honor" in my head, but I always thought it was quaint to talk about debts as a moral obligation. Kinsely does exactly that when he says, "At its root this is a very conservative, old-fashioned idea: A debt is a moral obligation."

It certainly is old fashioned, and it probably made sense a long time ago when people borrowed from people they actually knew. Until recently I think a lot of people hung onto this idea while their faceless credit card companies charged them 29.99%.

It seems like the Great Recession has changed the way a lot of people I know think.

People used to say this recession would change the way people spend money, but I don't know. It seems like everyone is still charging up a lot of debt. Maybe it's only made all of us as hard-nosed as the banks? Maybe that's a good thing?

When you talk about these issues with people who haven't filed BK or gone through what you've gone through, do you think they are changing the way they think too?

[IamOld]

I worked 60 hours per week trying to keep up with cc payments etc after I lost my main job last year - still working about 50 hrs per week. Here is the thing - yes we borrowed, yes we had every intention of paying it back, yes we did stupid things. But "moral" obligation and "honor" when the banksters are getting your money and mine at essentially ZERO percent interest and our rates are jacked up to 30%? No morality and honor just went out the window. It also went out the window with stagnating debts, and utter unwilligness (in our instance) of dear HSBC (on an unsecured loan) to forgive TWO - just TWO months of non-payment - that was the last straw. Everyone else we could have paid (God knows how) but over 5 years. So no, no "moral" issues here, now that the "ruling class" is openly robbing us blind.

[kornellred]

I filed Chapter 13 because I just didn't feel like paying my creditors any longer (although bankruptcy would have been inevitable eventually). After decades of minimum payments, I paid my creditors far more than they ever loaned to me. It's just plain stupid to pay the typical APR's that the banks charge.

[IamOld]

I filed Chapter 13 because I just didn't feel like paying my creditors any longer (although bankruptcy would have been inevitable eventually). After decades of minimum payments, I paid my creditors far more than they ever loaned to me. It's just plain stupid to pay the typical APR's that the banks charge.

Exactly - this is another thing - we wind up paying be dozens of times what we actually borrowed!!!!

[discouraged]

Truth, I am Old. I literally lost everything trying to be 'honorable'. Laid off, took out my 401k to keep up with payments. begged mortgage company to work with me and it took me a year, until I lost absolutely everything before I finally decided to bk.

Now I am living on what I have saved and wish I'd come to this decision a whole lot sooner.

[IamOld]

Truth, I am Old. I literally lost everything trying to be 'honorable'. Laid off, took out my 401k to keep up with payments. begged mortgage company to work with me and it took me a year, until I lost absolutely everything before I finally decided to bk.

Now I am living on what I have saved and wish I'd come to this decision a whole lot sooner.

Indeed indeed!!!! I have now $3K in my 401k. Spouse has $1200 - before the job losses we had north of $50,000. Oh well.

You are so right indeed.