Bankruptcy Is Not A Sin

Movimento Sem-Terra (MST) - Brasil (Projeto retratos)
Creative Commons Licensephoto credit: Daniel Zanini H.

As a Bankruptcy Counselor, I hear everyday how people are so stressed from their debt that they can’t sleep. I say this isn’t necessary, nor should it be happening. Why should people have this much stress over money the rest of their life? They didn’t commit murder, yet it would probably be easier on their mind if they did. All they did was borrow more than they could afford, had an unfortunate event happen to them, or both.

Bankruptcy’s Stigma

There are people who abuse the system, but you can’t let a few ruin it for the many. Bankruptcy shouldn’t have a stigma attached to it.Most people who file for bankruptcy have an unfortunate event happen and they are over extended. Of course some of that could be prevented with some personal finance knowledge. But who’s to blame for that? Can you blame someone who doesn’t really know any better?

If we lived in a society that sacrificed a virgin to the gods? Doesn’t that make it ok to kill a human being if it means better crops?

We live in a spendthrift society. It’s the norm to have everything you want because it makes us feel good. So can you blame people for borrowing money if it makes us happier?

The Lender Should Be Responsible

The way I see it is that you shouldn’t give personal loans to someone unless you think they will pay it back or you can afford to lose it. And if something happened so that they couldn’t pay it back you should work with them so that they would be able to pay for it. Otherwise you obviously don’t want the money back.

Why do some banks not want to work with you until you say the magic word “Bankruptcy”? They say it’s because if they did then everyone would try to have the bank work with them. I don’t buy it. First off, the bank could verify your income and prevent those that can really afford it from taking part in it. There’s really only one first off because that would solve the problem. Would the banks not be making more money because the interest is still accruing?

Dave Ramsey Is Wrong

Dave Ramsey doesn’t promote bankruptcy because it’s a “gut-wrenching, life-changing event that causes lifelong damage.” I don’t think so whatsoever. That’s more like the description if you don’t file for bankruptcy.

I hear people all of the time saying they wish they did bankruptcy sooner. They say that because it was so emotionally gut-wrenching to stick it out for so long.  Being relieved of that burden of debt is such a wonderful feeling.

What I Am Saying

I’m just saying if the banks won’t work with you and you tried all of your other options, don’t stick it out and hope it gets better. Make it better yourself by filing bankruptcy. It’s really not the end of the world.

But of course if you are pondering bankruptcy make sure you know about the negatives and positives. It can be harder to get credit in the beginning but you can start building up you credit right away.

If you had to go through bankruptcy because of mismanagement, then be sure you learn how to manage money because you will live in misery for 8 years because that’s how long it will be before you can file another chapter 7 bankruptcy.

If you filed because of an unfortunate event, then try to learn from it and try to prepare from it happening again.

Stop waiting and make something happen.

What do you think about bankruptcy?

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