The general public and BK

[espo1357]

It amazes me that people just don't consider BK when their situation is such a mess, especially with high interest cards and other crap.

Perhaps they can't afford it?

It a business decision, correct?

Am I missing something?

I filed for 13, and it was easily the right play, wiped out close to 60k consumer, stripped a lien, and have a shot to save my home.

Knowledge is power.

[Dst1]

I think there is still a great deal of stigma attached to BK. Take a step back a moment. There was a new BK law passed in 2005. That law did not make BK easier....it made it more difficult. I don't see how one reads that as a sign that the public approves of BK. I think many people would be happy if the BK option was banned altogether.

My own hope is that the current economic troubles will have at least one silver lining if it helps more people to realize that BK is a necessary social tool. If a society is to advance it must meet the future head on and that means taking risks. Just like other types of insurance, BK helps to disperse that risk among many members. The problem is that unlike health insurance or social security BK has a strong moral component. One cannot help getting sick (which is untrue, but people think that) and one can't help getting old (which is true) but one should help oneself from being involved in BK.

So there is a real tension. On one hand society wants to encourage people to take economic risks. One the other hand it doesn't want people to abuse that freedom. I don't necessary think the new law stuck the correct balance. But I recognize that where the proper balance lies is a thing reasonable people can disagree on.

[readytofile]

People see it as the worst possible thing you could do in life. And they are told that it destroys your life and that its practically impossible to do without losing everything so they are scared and misinformed.

I can say that our BK was the easiest thing I've ever done and it's a million times better than the hell I had been living in for years!

[AngelinaCat]

My 'Hub and I did everything we could possibly do--including making some ghastly financial mistakes--trying to AVOID filing BK.

We cashed in Life Insurance policies, cashed in 'Hub's 401k Retirement, sold property containing a family cemetery, then selling the mortgage note that we held on that sale.

All went for naught. We had to file anyway.

Our only regret NOW is that we did not find this site sooner. If we had found this forum and studied up on everything BEFORE we hired our inept attorney, we could have possibly avoided some of these mistakes.

Good wishes to all~~

[Depressed]

I really, really regret not doing this years ago. Thought I could find a way to handle things on my own. Only made the situation worse. The amount of stess that I've put myself through has probably taken years off my life. Hasn't made life easy for the wife and three kids either.

I'm off to another consultation in the morning. Hopefully, this will turn out better than the last one. When this whole process is over I hope to look at life as a new beginning.

As far as the social stigma.... I don't really care. Nearly 14 million individuals have filled for bankruptcy in the last 10 years. I know of at least 3. Their lives are much better now. How many others out there that haven't filled, really should. I wasted 20+ years of my life paying and basically living off credit cards. Had to use them, because most of my pay was going to the payments. I always found it amasing that someone in their 20's that had never made more than $23,000 a year could have a half dozen cards with limits totaling well over 100k. Once the banks get a hold of you, it's very hard to get away. I'm a firm believer now that no one should have more than one card and it should have a limit less than what they earn in a month. It should only be used for emergencies, or maybe travel stuff like rental cars and hotels. If you can't pay cash, you probably shouldn't be buying it. Never, ever, should a balance be carried month to month. I hate to think about all of the interest I paid over the last 20 years.

[espo1357]

BK is a way out of financial slavery.
Another reason I saw the light was the emergence of this governement bailout. This really upset me, as I have paid well over 100k in taxes the past decade since I started working. I never set myself up for this failure. The housing nonsense really bit me in the ass, as it did many people. The key is to get educated and know your rights.

On a sad note, its a shame that some people actually do end their lives over financial problems, when filing a BK would solve so many problems.

This site is a blessing from God imo.

[Depressed]

Unfortunately, I do know someone that committed suicide over their financial situation. Left a wife and two young kids. It just doesn't make sense.

[AngelinaCat]

Unfortunately, I do know someone that committed suicide over their financial situation. Left a wife and two young kids. It just doesn't make sense.

AARRGH!! Damn, damn, and Just DAMN!! That is such a shame. My paternal Grandfather did a similar act with a similar situation.

Are you able to talk to the Lady and offer some comfort?

[wantout]

My 'Hub and I did everything we could possibly do--including making some ghastly financial mistakes--trying to AVOID filing BK.

We cashed in Life Insurance policies, cashed in 'Hub's 401k Retirement, sold property containing a family cemetery, then selling the mortgage note that we held on that sale.

All went for naught. We had to file anyway.

Our only regret NOW is that we did not find this site sooner. If we had found this forum and studied up on everything BEFORE we hired our inept attorney, we could have possibly avoided some of these mistakes.

Good wishes to all~~

I did alot of the same, and also wish I had filed a year ago.....

[Flamingo]

Decades ago before credit cards and the loan machines were let loose, no one hardly ever heard of anyone besides maybe a business now and then filing bankruptcy. People filing were shunned and that stigma has hung around to this very day. What has caused the increase in bankruptcy is the stupidity of the general public as to how to handle their finances and control their money/use of credit and the greed of all the lenders. Now due to the large debt loads people have taken on and all the job losses, it became a huge infested bursting boil. My main worry is how all the dumped debt via all the bankruptcies will be handled and how that will impact us all and generations to come with increased costs, taxes, fees, etc.

After going through a bankruptcy, especially a Chapter 13, it makes you realize exactly what you did wrong, that you need to budget and, yes, there is still a big stigma associated with it since many people still associate it with failure and lack of financial control. There are still many multiple and serial bankruptcy filers. They do not know how to control or manage finances or just like to play the system evern as hard as the system has been made to avoid that.

[forgotten]

BK is a way out of financial slavery.
Another reason I saw the light was the emergence of this governement bailout. This really upset me, as I have paid well over 100k in taxes the past decade since I started working.

That got me thinking... so I went back and did some quick guesstimates.... about $100k in federal income tax over the last 10 years, not including social security, medicare, state, etc.

Yeah. Since my money went to bailout banks it seems only fair to cancel out some of my debt along with it (of course, i'm paying them another $60k in my bankruptcy!).

[frogger]

You're right on track espo. BK is nothing more than a business decision. It takes time to get to that point, but when you get there, you know you are doing the right thing.

[flyinbroke]

People see it as the worst possible thing you could do in life. And they are told that it destroys your life and that its practically impossible to do without losing everything so they are scared and misinformed.

I can say that our BK was the easiest thing I've ever done and it's a million times better than the hell I had been living in for years!

They buy into the FICO hype. YOu have the idiot freecreditreport guy and Ben Stein telling the entire free world that the worst thing that can happen is a poor credit score. If I am not mistaken, Warren Buffet only has one in the high 600s...there was some article about it. (Moral of story: when you are rich, you don't worry about FICO.) On this, I believe Dave Ramsey: this is the "I Love Debt" score because people who pay cash don't have much of a credit score either.

If you believe the pundits, BK is the nuclear bomb of your credit score. The articles tell people you can lose everything. While it is destructive, by the time you face the inevitable your FICO is tanked anyways. Even if you do everything right, the banks have probably tanked you anyways by major CLDs as you pay off debt. You always look maxed out, and your score plummets. Ironically, the lower your score when you file, the less it actually falls. (Ah, the things you learn from the forums of the broke.)

In the end, you have to take away emotion. Businesses and billionaires file BK all the time. It is a business decision, nothing more and nothing less.

[Redfish]

Most of the general public just does not know enough about bankruptcy to understand how it works. The few people we have told about our situation have all at some point during the conversation asked, "Which type of bankruptcy are you filing? The one where you lose your house and everything you own?". People in general don't get it, only picking up bits and pieces of information from TV, the internet, and newspapers. Until they or a close contact are contemplating bankruptcy their knowledge of the process is skewed. I know mine was.

I think as this country's current economic condition progresses, more and more citizens will learn about bankruptcy on a very personal level as either they themselves or close friends and family are forced to take a hard look at bankruptcy in order to better their financial situation.

My work background is in land development, and these days no one blinks an eye when a developer cashes in his chips and lets the bank have back his half finished development because he couldn't find buyers/investors. "Tough luck form him, it's happening everywhere" is the common response. Yet when you talk about someone filing a personal bankruptcy it is often met with disdain.

It is so important to treat your personal financial situation just like a business and know when to say "enough is enough".

[fireworks]

There's still a huge stigma attached. I had a job offer rescinded last week due to bankruptcy and charge-offs.

I think the biggest issue is that most people see an individual in bankruptcy and immediately assume that the individual spent too much money on luxuries and un-necessary purchases (eating out too much, big screen TV, too much house). It seems that the social stigma is much less when the bankruptcy was the result of a business failure, drastic medical issue or other "big" reason. When people find out I filed for bankruptcy they're at first disappointed, when I tell them that my business failed and caused it they say "well, that's happened to a lot of people these days..."