I am still amazed when I read ignorant stuff about the reason people are going bankrupt is because there is no more stigma about bankruptcy. No, the reason people are going bankrupt is because creditors are manipulating the system for their own accounting or reporting means and not allowing people to repay their debts with as much enthusiasm as the banks had when the person was borrowing the money.
People want to repay, creditors evidently don’t want the money back over time. Crazy, but true. Frankly, if I was an investor, especially an institutional investor in a major bank I’d ask to take a good look at their repayment policies for people that have fallen behind in their obligations. I think you’d be shocked by the hurdles lenders put in place. But I digress.
This is the story of one person, me, that went bankrupt and felt the stigma of bankruptcy. In 1989 I went bankrupt and in 1994 I founded the not-for-profit that started to help people find good solutions for bad financial problems. After living through the experience I thought there had to be a better way. But it wasn’t until 1999 that I went public with the fact that I myself had gone bankrupt. And it coming out with that story wasn’t by my own volition.
Up until that day in 1999 I had been able to successfully hide the fact that I had gone bankrupt. Only about four people in the world knew my secret. I had not shared it even with friends. You see, personal failure is not something that people want to broadcast. It is not a badge of honor. And certainly not a bumper sticker you’ll see. “Kiss me IÃ¢â‚¬â„¢m Bankrupt.“
I kept my bankruptcy quiet for the same reason everyone else does and will, because it does hurt and is shameful. I’m sure that each person has their own reason why they want to withhold their bankruptcy secret. For some it’s shame, for others it’s job issues. It doesn’t really matter. The fact is that going bankrupt is a part of your life that you are not proud of. Bottom line, most would like for it to be a secret, forever.
Even today when I read all the stories that too many people go into Individual Voluntary Arrangements (IVA), debt management plans (DMP), informal repayment plans, Personal Insolvency Agreements (PIA) debt settlement programs, or remortgage the house to pay off the debt, it makes me mad. The reason that people flock to these solutions is because they don’t want to go bankrupt. The reason that so many people turn to alternative solutions is simply because they don’t want to go bankrupt, they want to repay their debts.
Even today, while my bankruptcy has been a great life experience that I have been able to share to help countless others, if there had been another way to reach the same insight I would have preferred to have found another way. It’s kind of like becoming wiser for some reason by getting hit by a car. While the wisdom may help others, not getting hit by the car would have been nice as well.
I have not forgotten the moment my bankruptcy secret became public. I was doing an interview with The Washington Post for yet another consumer debt story and the reporter asked me in passing if I had ever been bankrupt. Crap. A wave of panic spread through me. I had never contemplated coming out of the bankruptcy closet and now IÃ¢â‚¬â„¢m being asked by a reporter from one of the worldÃ¢â‚¬â„¢s leading newspapers. Crap, crap, crap. So I did what many people would do in that situation, I said, “No.”
The reporter left and I turned to my friend and PR Director and said, “Nancy, I just lied to the freaking Washington Post. I did go bankrupt in 1989.” Nancy listened while I shared my story with her and explained the shame and failure that I felt by being bankrupt. I then immediately went and talked to my wife Pam about this situation and while neither of us wanted to come forward with our personal failure, we felt that we had to be honest about the reality and that doing so might help someone else. We really did get dragged out of the closet kicking and screaming.
Latter Nancy called the reporter back and I came out and admitted my reversal on that bankruptcy question and then I sat down and wrote an email to my 35 staff members at the time and came out of the bankruptcy closet to them. The email took forever to write and there was nothing easy about coming out of the bankruptcy closet or sharing my personal failure with my staff, friends, world, clients and especially The Washington Post. All in all, a very uncomfortable experience.
Since that time my bankruptcy story has helped many I am told. A couple of years later, Pam and I made a video about our bankruptcy story to share with others. All of which has helped people.
So for those ignorant people that still insist that bankruptcy has lost its stigma, I say to you, “The hell it has.” But the lesson I did learn from the entire situation is that on a personal level, my life has been much better by not having secrets and sharing my experience and dealing with the issue of being bankrupt has provided emotional relief from the intense shame and failure I felt.