Bankruptcy

[Quiksilvr]

You seem to think that bankruptcy is a constitutional right to a "do-over".

Never mind that it was bad moneymanagement that got you there, people have a right to wash their hands of the debt they incurred.

You see no problem with people not living within their menas, so they are somehow then entitled to have someone else bail them out?

It's not a "constitutional" right to a do-over, but it is a right to a fresh start (which often appears like a do-over) granted by the United States Bankruptcy Code.

Of course there is a problem with people living beyond their means. Of course bad money management is bad! Regardless, our bankruptcy system has to protect everybody if it is going to be objective and not completely arbitrary or subjective. I would rather have a set of laws that I knew would protect me if I needed them (and accept the fact that there will always be some people who abuse those laws), than be subject to a set of laws that either use arbitrary cutoffs and tables or that use a judge's "good judgment" to give me relief.

The inevitable bad apples are the tradeoff for an objective, comprehensive system that applies to everybody.

 

[Camicar]

I have known three people who declared bankruptcy with three totally different scenarios.

#1: Person had an accident, incurred medical expenses that her insurance did not cover (BC/BS 80/20 split), then lost her job due to medical complications, had to take a much lower-paying job, got laid off from that, got another lower-paying job, etc. She has tried so hard to pay those hospital and doctor bills back, but simply cannot get ahead no matter what. And the credit agencies are relentless in hounding her -- she is nearly at a nervous breakdown, which is not helping her ongoing medical recovery. I can totally see why she is ready to declare bankruptcy.

#2 My father's estate. My father was indigent, basically. Yeah, he had a roof over his head... But that was it AND it had a lien on it due to his shenanigans with the divorce. He was disabled due to emphysema from smoking, had NO income, no health insurance, no life insurance. And yet, every week he got tons of credit card offers in the mail. Well, he knew he was dying, so he'd use those ccs to pay for every day expenses and who knows what. He dies, we declare the estate bankrupt when we find out his assets totalled $10000 and his credit card bills alone were $35K. Credit card companies hounded us -- even after declaring bankruptcy -- trying to guilt us into paying. Was my father right to do what he did? No. BUT...My attitude was that if you make these scattershot credit card offers without really checking into people's financial sitautions, sometimes you're going to get screwed. And guess what? You got screwed. Cause and effect. If these companies had taken one second to look at his situation, they would have never given him a credit card. They didn't, so that's their problem.

#3. Couple spent money like water, like no one I'd ever seen before in my life. They would take money their parents gave them for baby food/supplies and go to the antique store and buy lace tablecloths. Not kidding. They had debt consolidation loan after loan after loan and finally declared bankruptcy -- after going out and spending more than $50K on antiques and rock band equipment (the husband thought he was the next Iggy Pop). I thought that was morally bankrupt.

 

[pooh6890]

The day after I signed the papers in court for my bankruptcy, I actually received 3 credit card offers stating "now that you have a fresh start, let us help you". I threw them away. It's also the bank and credit card companies that feed into this mess.

 

[kpm76]

The day after I signed the papers in court for my bankruptcy, I actually received 3 credit card offers stating "now that you have a fresh start, let us help you". I threw them away. It's also the bank and credit card companies that feed into this mess.

I agree. Why do you think we are seeing so many foreclosures? 3-4 years ago banks were telling people they could afford far more than they actually could. I am not saying that personal responsibility doesn't factor in, but if a "professional" tells you it's ok and will work out, alot of people will agree with them.

 

[Allison]

Honestly, I don't find it interesting. I really don't see what one has to do with the other.

 

[pooh6890]

Honestly, I don't find it interesting. I really don't see what one has to do with the other.

 

[RitaE]

I think she's referring to the OP

Bankruptcy
Anyone else find it interesting that members of this board completely belittle someone who is contemplating filing bankruptcy, but yet our own Walt Disney filed bankruptcy...

 

[Allison]

I think she's referring to the OP

Yes, thank you. I was responding to the OP's question.

 

[U2_rocks!]

What business is it of yours if someone says they're contemplating, and someone else belittles them?

It works both ways. If you don't want your business known, don't put it on a public message board for all the world to know.

And it does make a huge difference. People who try to be responsible but are down on their luck and haven't done anything wrong deserve to have another chance.

People who are just spending money like there's no tomorrow, only to file bankruptcy and do it all over again makes it more difficult for the responsible people.

Do you really think that when someone owes a credit card company ten grand and that person files bankruptcy that the company doesn't get it back? Sure they do. They get it from other customers, the responsible ones, by adding silly little fees for this, upping finance rates, putting surcharges on things.

You tell me what the difference is in these two scenerios:

Mother is driving her child to school. The weather is kind of nasty, and she veers off the road, and into a tree. In order to save their childs life, they go through months of hospitalization, therapy, surgeries, accumalating 450,000 dollars worth of bills. They're going to lose their house if they don't file bankruptcy.

OR

Someone who makes minimum wage put a big old flat screen TV on a credit card. Another credit card offer comes in the mail. They use that one to book a WDW vacation. They use a third one to pay for all their meals and souvenirs. The husband gets a credit card also. They use that one for a trip to Las Vegas. And of course, they pull off lots of money from that card for sightseeing and gambling.

The bills start coming in. They use another credit card to pay the old credit card bills. But that doesn't stop them from booking another WDW vacation -- hey, it's their birthday, they deserve 5 days at the Polynesian, it's been a stressful year.

Fast forward to 3 years later, and they've racked up 164,000 dollars in CC debt and are in danger of losing their home if they don't declare bankruptcy. So they file, save their home, and three months later, they're planning their return to "The World."

Tell me there's no difference.

World of difference, and I just don't get how some people can't see that!

 

[SplshMtn99]

Declaring bankruptcy over a failed business deal is one thing.

Declaring bankruptcy over living high off the hog & not learning from the experience is entirely different. That's usually the criticism I see around here. Declaring bankruptcy & then going on a luxury trip.

Personally I'm not a fan of bankruptcy unless due to extreme medical bills. Especially not a fan when the person made bad choices along the way & continues to repeat them.

 

[Laura]

Anyone else find it interesting that members of this board completely belittle someone who is contemplating filing bankruptcy, but yet our own Walt Disney filed bankruptcy...

http://www.cnn.com/2008/LIVING/personal/11/19/mf.successful.people.survived.bankruptcy/index.html


"3. Walt Disney

His name may be a stalwart brand today, but early in his career, Disney was just a struggling filmmaker with too many bills. In 1922 he started his first film company with a partner in Kansas City, Kansas.

The two men bought a used camera and made short advertising films and cartoons under the studio name Laugh-O-Gram. Disney even signed a deal with a New York company to distribute the films he was producing. That arrangement didn't work out so well, though, as the distributor cheated Disney's studio.

Without the distributor's cash, Disney couldn't cover his overhead, and his studio went bankrupt in 1923. He then left Kansas City for Hollywood, and after a series of increasingly successful creations, Disney debuted a new character named Mickey Mouse in 1928. Mental Floss: The secrets behind your favorite toys"

Well, I think DISers don't belittle everyone who's declared bankruptcy or is contemplating it. Plenty of people here have posted about past bankruptcies without getting belittled. DISers do deride folks for bragging about overspending before filing or demonstrating a complete lack of willingness to fix the shopping and WDW addictions. If folks don't want to have others dump on their poor financial choices, don't tell everyone about them.

Certainly a business going bankrupt because a deal fell through is different from a DISer who filed for bankruptcy and doesn't understand that the three trips to WDW a year--in deluxe resorts, no less--may not be the best thing for the budget.

 

[LoraJ]

Well, I think DISers don't belittle everyone who's declared bankruptcy or is contemplating it. Plenty of people here have posted about past bankruptcies without getting belittled. DISers do deride folks for bragging about overspending before filing or demonstrating a complete lack of willingness to fix the shopping and WDW addictions. If folks don't want to have others dump on their poor financial choices, don't tell everyone about them.

Certainly a business going bankrupt because a deal fell through is different from a DISer whole filed for bankruptcy and doesn't understand that the three trips to WDW a year--in deluxe resorts, no less--may not be the best thing for the budget.

Especially when they brag about racking up charges on their credit cards a month before they file. And then once they file they brag about being debt free.

DISGUSTING!

I wish there were much stricter restrictions on bankruptcy. If you file based on out of control spending, I don't think you should have your slate wiped clean. I think you should still have to pay back that debt in structured payments. Otherwise they will never learn and those of us who are responsible with our money have to pay the price.

 

[Northstar]

I wish there were much stricter restrictions on bankruptcy. If you file based on out of control spending, I don't think you should have your slate wiped clean. I think you should still have to pay back that debt in structured payments. Otherwise they will never learn and those of us who are responsible with our money have to pay the price.

Well, but maybe the lesson to be learned is for the LENDERS to be more careful about advancing money to people without being sure they can and will pay it back? Why should the CC companies get to be so irresponsible about who they lend to?

 

[mickeyboat]

Well, but maybe the lesson to be learned is for the LENDERS to be more careful about advancing money to people without being sure they can and will pay it back? Why should the CC companies get to be so irresponsible about who they lend to?

Because the lenders can just pass those costs on to the rest of us in the form of higher interest rates and service charges. There is no incentive for them to cut back on the credit they are extending - even to people who clearly should not have it.

 

[Becky2005]

Well, but maybe the lesson to be learned is for the LENDERS to be more careful about advancing money to people without being sure they can and will pay it back? Why should the CC companies get to be so irresponsible about who they lend to?

This reminds me of a conversation DD and I were having the other night about a FOUR year old getting a credit card. Apparently, the mom sent the application in with the CORRECT information just to see what would happen and the child was approved.

I just did a search and couldn't find a 4 year old but did find this

http://www.parentdish.com/2008/06/20/five-year-old-gets-credit-card/

It's pretty sad when just by birthdate alone should be an automatic declined.

I'm not laying all the blame on the credit cards, there are definitely adults that play the system but you would think something as basic as the person being 18 to get a card without a co-signer would be logical.

 

[LoraJ]

While I agree that credit companies are idiots for giving credit to irresponisble people, it is not an excuse. When you use the card you are agreeing to their terms. "Well they shouldn't have givne me the card in the first place" is not an excuse when a debt collector calls you.

 

[C.Ann]

Should be interesting to see what the bankruptcy and foreclosure rates are a few months after Christmas - when all those people standing in lines to buy electronics and then rushing out to eat dinner after a full evening of shopping with credit cards realize they have no way to pay them..

 

[rie'smom]

The only time I've seen any belittling is when a poster is getting ready to declare bankruptcy or they're about to lose their home but they just have to take 1 more WDW vacation.
Irresponsibility is asking for ridicule.

Did Walt have to take a vacation after declaring bankruptcy?

 

[gmboy95]

Anyone else find it interesting that members of this board completely belittle someone who is contemplating filing bankruptcy, but yet our own Walt Disney filed bankruptcy...

http://www.cnn.com/2008/LIVING/personal/11/19/mf.successful.people.survived.bankruptcy/index.html


"3. Walt Disney

His name may be a stalwart brand today, but early in his career, Disney was just a struggling filmmaker with too many bills. In 1922 he started his first film company with a partner in Kansas City, Kansas.

The two men bought a used camera and made short advertising films and cartoons under the studio name Laugh-O-Gram. Disney even signed a deal with a New York company to distribute the films he was producing. That arrangement didn't work out so well, though, as the distributor cheated Disney's studio.

Without the distributor's cash, Disney couldn't cover his overhead, and his studio went bankrupt in 1923. He then left Kansas City for Hollywood, and after a series of increasingly successful creations, Disney debuted a new character named Mickey Mouse in 1928. Mental Floss: The secrets behind your favorite toys"

That's what cons do...they attack working folks for having trouble and wanting a handout and defend the charlatons in big business who coul care less about them

 

[Ilovemylife]

Especially when they brag about racking up charges on their credit cards a month before they file. And then once they file they brag about being debt free.

DISGUSTING!

I wish there were much stricter restrictions on bankruptcy. If you file based on out of control spending, I don't think you should have your slate wiped clean. I think you should still have to pay back that debt in structured payments. Otherwise they will never learn and those of us who are responsible with our money have to pay the price.