The question of morality in bankruptcy

[jjim120]

Absolutely! Our banks, legal system and much of our country is completely immoral. It is all about money and power, about twisting and spinning the law to prevent justice for the little guy. In fact, a lot of today's bankruptcies are attributable to unethical and immoral acts by banks. They took taxpayer money to cover their mistakes, but did not use it to honor their commitments. Instead, they went out and screwed over their borrowers and the employees and small creditors of their borrowers to double the take, using devious legal trickery. These corrupt acts caused many workers in this country to lose their jobs, thereby putting them into bankruptcy.

[tobee43]

i believe that pastor artgood is just the type of example that we see here on this site...

on this site i have spoken with doctors, janitor, lawyers, construction workers, police, firemen, teachers...computer tech.... business people....we have every walk of economic status now getting hit hard and harder everyday.

this crisis has to social boundaries.

[discouraged]

I agree. I was an idiot and even though I was unemployed, it wasn't until I had 3 catastrophies, dog got sick and took him to the vet (198), car needed shocks and struts desperately (900) and the dishwasher exploded (plumber 300), that I finally realized I did not have the money anymore. I'd used up all my savings and 401 trying to keep up the payments and they were gone.

After I stopped paying and the harrassing phone calls began (ringer is off now and they just hang-up), I could have kicked myself. 20 years of always paying and they were awful! Wish I'd kept that money and started bk a long time ago.

It would be hard, as a Pastor, but I believe that nothing happens without a reason and you have to trust that He knows and understands the predictament we are all in.

[artgood]

I've had to come to the same conclusions. As a pastor I feel especially "guilty" that I am filing bankruptcy. However, if it weren't for all of the fees, charges, and interest hikes, and if creditors would actually be willing to treat you like a human being and work with you, I might not be in the mess that I am in.

Basically it came down to putting food on the table - had a wake-up call last January when I really couldn't - or paying creditors. It really became a no-brainer. It has been a gut-wrenching decision that has meant lots of sleepless nights reading this forum and anything else about bankruptcy that I could find, but in the end it has brought us some relief from the constant feelings of hopelessness. We'll see what happens after we finally file.

[SweetGeorgia]

The guilt you feel is just years and years of conditioning - like Pavlov's dogs and the dinner bell. We have been trained to feel guilty because it is profitable to others. They don't have to beat us up if we beat ourselves up!

In lawsuits, there are punitive damages available sometimes - rarely used, but intended to punish a wrongdoer and dissuade others. There are no punitive damages available in contract lawsuits (at least not in Georgia, and the law here is very harsh). Because breaching a contract is business, just doing the math. You pay one price or the other - and each is morally neutral.

Did you ever negotiate a term in those credit card contracts? Did you ever get to remove or add language from those long agreements they send? No, I bet you didn't. There's a battalion of lawyers on one side, and little ol' you on the other side. They are by far the most powerful party in this relationship; logically they bear the most responsibility for the outcome. And yet we've been trained to see the weaker party as equally (or even more) responsible. That's profit motive, not morality.

[rjmwx81]

The moral issue lies not with the debtor, but with the creditor, in my humble opinion. Yes, the honest and moral thing to do is to pay back what you were loaned. However, most of us aren't looking at BK because we couldn't pay the original balance. We file because we cannot pay the interest rates, late fees, and various outrageous charges. We file because the hourly calls from collection agencies demanding payment or a pound of flesh are just too much. We file because the creditor can snatch every last dime out of our bank accounts if we're not careful, leaving us with nothing to survive on.

In every system of ethics and morals that I've studied, a person has the right to use any means necessary to ensure their survival. BK is no different. We don't file in order to live a luxurious life at someone else's expense. (Some do, I suppose, but look at the stories here...everyone has had a hardship of some kind or other...the cheaters are few and far between.) We file because it is our only option for survival.

Not to get all religious about it, but even the Bible talks about the immorality of aggressive creditors. There's a chapter in the Book of Amos where moneylenders say "We will buy the lowly man for silver, and the poor man for a pair of sandals." (Amos 8:6) Sound familiar? We used credit for life's necessities, and now the banks own us, like slaves. BK restores our freedom. And there is nothing immoral about restoring one's freedom.

[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.

[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!

[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]

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.

[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]

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.

[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

[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?

[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.