I am forever faced with people who tell me that no matter how bad their financial situation is they will never consider bankruptcy as an option.
Now I understand to that person, the thought of bankruptcy is reprehensible. They feel it is morally wrong or against their religion. They feel it is a violation of the trust others have placed in them or they don’t want to break a promise. Sometimes they are just afraid of how they will feel after bankruptcy or think bankruptcy holds some stigma that forces you to wear a scarlet letter. I acknowledge, all of those beliefs and feelings are real to the person who feels that way. In fact I felt many of those same emotions before I went bankrupt.
But what I witness is that people, for whatever reason, who proclaim bankruptcy is not a consideration, actually allow their fear to drive their decision making. They are so afraid of bankruptcy, maybe because it is unknown, they make alternate choices that leave them in a much worse life position. It is almost as if they feel compelled to punish themselves for their perceived financial transgressions.
To me, an experienced outsider, and one that lived through bankruptcy. I see a different picture. I see people that in an effort to avoid bankruptcy, drive cars that need urgent repair, drop health insurance, live in unsafe housing, can’t afford needed medicines, can’t properly care for their children, have an absence of food on the table, can’t afford anything that can bring them joy in life, lose relationships, etc. What frustrates me is that it certainly appears that to suffer any of those maladies as a result of your money troubles, is more irresponsible, more detrimental, and more wrong than to swallow the medicine of bankruptcy.
When faced with this situation I typically ask people the following questions:
- Do you have a greater responsibility to repair your past or your future?
- How does punishing yourself and family help to make this situation safer or better?
So what are your answers?