Why less stigma with foreclosure than BK?

[Forthebirds]

I overheard a conversation the other day where a woman was discussing all the details about her recent foreclosure. I have had several friends foreclose, and they will openly discuss what happened. I also have several friends who filed BK and no one really talks about it. What gives? Why is a foreclosure less stigma than a BK? I never hear chatter about "oh a foreclosure might keep you from getting a job" like people say about a BK. Just wondering what you all think.

[bcohen]

Neither foreclosure, nor bankruptcy have any "stigma" anymore, except among stuck-up snobs! The decision to walk away from a house which has depreciated severely, and/or to file for bankruptcy protection is a purely FINANCIAL decision, and should be treated as such. In this terrible economy, tens of millions of people have had to readjust to a lower standard of living, lower salary, and less purchasing power, due to high unemployment, and the collusion of businesses to keep wages down. As a result, people who were previously able to pay their bills without any problem may need to give up their house and/or file for bankruptcy.

Anyone who would be so arrogant as to judge me (or anyone else who went through foreclosure or filed for bankruptcy) can go f**k themselves. It's not as if the people making the snide remarks would be willing to help pay my bills, or anyone else's for that matter.

[keepsmiling]

The banks and other powers that be have done a good job of making that be the case. The longer we stall on bk, the more blood they can suck from us.

Wait til those foreclosed homes sell for a loss and those people get hit up for deficiencies.
They may all be filing bk as well. (depending on their state, of course.)
Stay tuned to see how those convos continue....

[kawh]

I'm going to take a try at this, cause I like psychological crap. Here's what I think, which is --

IF I stop paying my mortgage and am foreclosed on, I have left the mortgage holder the property, which was our deal all along, and they still have the option of going after me if there still is something owing. They are protected.

On the other hand, IF I file bankruptcy -- and I did -- on my unsecured loans, I leave the loan holders only the memory of me and what they paid on my behalf, based on their belief I would pay them back. So it's less fair to the creditors than foreclosure.

JMO, but personally I would not talk much about either one, unless foreclosures have become so common it's like sharing war stories. If I HAD to talk about one or the other, I would talk about the foreclosure and not the bk, for the reason I would not feel good about having left someone with nothing. But in bk, everyone pays according to their means, and the court said I didn't have means, but still, am not going to talk about it to people who wouldn't relate to financial hardship.

[Drazil65]

Agree, the banks have created this (and brainwashed the public opinion) into believing that if you foreclose or file bankruptcy you are the scum of the earth, a bottom feeder of the worse kind. For years it was like a disease and most of us fell for it. They used the credit scrore as power and convinced that the American dream had to do with home ownership and credit. BS...and now we as a collective people are now standing against the banks and saying "BS". First the Amercian dream has little or nothing to do with owning a house and you are basically renting the house from the bank for 30 years anyway. After so many lost the equity and the potential nest egg we all counted on it became clear that the banks giveth and the banks take it away! They did what was in their best interest by inflating appraisals on homes and giving loans to people that probably should not have qualified (creative accounting at best). Even now with all the foreclosure inventory not being reported they are trying to create a situation where they lie (again) that inventory is low so build (new home construction push). It distorts the housing market figures and makes it appear like things are so good again get out there and buy...really?

We understand so much more now and we made a business decision for our family that was absolutely right and things are moving forward. They cannot scare us any longer, it does not matter to us what our credit score is, we do not care and the banks hate that. They hate that we now have knowledge that lets us make up our own minds and run our own finances.

[bcohen]

Speaking of credit scores, my credit scores actually went up when the bankruptcy hit my credit reports, at least according to the "fake" scores provided on Credit Karma. So I guess bankruptcy isn't as bad for your credit as the "experts" would claim.

[tobee43]

personally, i think it's because thousands have actually "planned" walkaways. it's all draw out on a nice piece of paper. these people haven't lost their jobs, or gotten ill, just in over their heads and are choosing to walk. now, finally bk, i believe takes a multitude of situations that leads one to that direction as opposed to just walking away from a house you could never afford. just a thought. that actually i came to after reading a ton of forums and stories.

[msm859]

Banks have done a wonder job in their propaganda machine. Remember the commercials about your "Fico" scores. They want people to feel bad or guilty about filing BK. This forces many to do everything possible to avoid what might be inevitable, even if that means people draining their exempt retirement accounts, borrowing from relatives etc. It should SOLELY be a business decision. One should reflect on any actions/decisions they made that might have contributed to the situation and learn from them. Other then that no one blinks when a company goes BK - should be the same for people.

[TheBajan]

Agree, the banks have created this (and brainwashed the public opinion) into believing that if you foreclose or file bankruptcy you are the scum of the earth, a bottom feeder of the worse kind. For years it was like a disease and most of us fell for it. They used the credit scrore as power and convinced that the American dream had to do with home ownership and credit. BS...and now we as a collective people are now standing against the banks and saying "BS". First the Amercian dream has little or nothing to do with owning a house and you are basically renting the house from the bank for 30 years anyway. After so many lost the equity and the potential nest egg we all counted on it became clear that the banks giveth and the banks take it away! They did what was in their best interest by inflating appraisals on homes and giving loans to people that probably should not have qualified (creative accounting at best). Even now with all the foreclosure inventory not being reported they are trying to create a situation where they lie (again) that inventory is low so build (new home construction push). It distorts the housing market figures and makes it appear like things are so good again get out there and buy...really?

We understand so much more now and we made a business decision for our family that was absolutely right and things are moving forward. They cannot scare us any longer, it does not matter to us what our credit score is, we do not care and the banks hate that. They hate that we now have knowledge that lets us make up our own minds and run our own finances.

Very well said...

[LadyInTheRed]

The best way to fight the stigma around bankruptcy, is for those of us who have filed to hold our heads high and talk about it with our family and friends. The stigma is based on ignorance and misinformation. The more people know, the less stigma there will be. I have no use for anyone who judges me for filing BK. Who cares about those "stuck up snobs"! (Great description, bcohen).

[joshuagraham]

I would say that it is because a foreclosure is considered to be a "walkaway" on an underwater mortgage - that somehow the mortgagor (or -ee?) was an investor and thus, having that entity take a hit is considered as just a business situation. However, most folks consider bankruptcy to be simply welching out on paying back credit cards for stuff that was bought and consumed - which is different from a home since it is not something that is consumed.

[DaisysMom]

Before I say this...it is not how I think, but it is how I believe many in this country are thinking...so don't flame me....

I think it is because everyone knows that the big bad mortgage lenders made "predator lending" the new buzz words in our current financial climate. People who are being foreclosed upon are either victims of unscrupulous lenders or victims of the deflated economy/workforce. It's not looked on as their fault.

People who have declared Bk are unfortunately seen in a different light. We are to blame. We didn't know how to manage our money, we misused credit cards, we are deadbeats...etc...on and on. We did it to ourselves.

That way of thinking is not true for thousands of reasons, but when you are luckily sitting on the other side with financial security, it's easy to throw stones. Plus there may be a bit of envy in there....(yeah I said that.) Knowing that you had the kuhanas to go get a fresh start and get out from under killing debt. Pure envy!!

DM