The Financial Planning Follies

It seems that some people do not recognize that despite some unpleasant aftereffects, bankruptcy is truly a "fresh start."

Instead of being satisfied with the benefits they receive some people remain unhappy.

Here is a letter I received:

"Why does it take attorney's six or more weeks to discharge a chapter 13?

Why do apartment leasers hold a bankruptcy against you when I don't see how you could add apartment rent onto your bankruptcy?

If life is so miserable after a bankruptcy, why are lawyers constantly telling people it's okay to file. (They want to get paid.) "

My response:

"Six weeks for a discharge isn't that long and may well be governed by the schedule of the bankruptcy court.

Some landlords may not want to rent to someone with bad credit. They may feel that they will have to chase the renter for their money. Dispossessions are time consuming and expensive.

In many cases the landlord will get possession of his apartment, but may never recover the unpaid rent. While the court proceedings drag on, the landlord has lost a part of his source of income. So he has a right to be careful.

However life is not that bad after bankruptcy. Debtors used to be sent to jail.

Not too long ago, bankruptcy would mean that the bankrupts would have to carry a stigma for life. Many committed suicide rather than face the disgrace.

Many people who went bankrupt during the Great Depression spent years paying off their discharged debts as a matter of honor.

Now nobody much cares. You will be able to get credit. Your debts have been wiped away. What more can you ask for?

You were the one who ran up the debts, whether through bad luck, bad planning or the simple inability to control your spending.

You did contract to repay the money and you didn't. For the most part you are now free of the pain and pressure caused by your financial problems. You will face some obstacles over the next few years, but you should have realized that before filing.

You approached a lawyer, not the other way around. I'm sure the lawyer didn't twist your arm to force you to file. If you've gotten your discharge, be happy, restart your life and live with the consequences.

Things could be worse."

I received a reply:

"I didn't need a scolding. I simply asked a "professional" a few questions.

As a matter of fact the most of the creditors that I paid off in a bankruptcy solicited me, I did not seek them out.

They checked my credit and before I accepted their card or line of credit, I had one credit card and good credit.

When hard times hit, I communicated with them but as creditors do they added interest and late charges. In a Chapter 13 they recovered as much as they would have had I not fallen on hard times.

As for renting an apartment it is not just people that file bankruptcy that skipout without paying rent nor is it people with bad credit.

If everyone counted up the cost before filing bankruptcy, Bankruptcy Attorneys and Trustees would have no jobs. And credit card companies would continue to get rich off peoples misfortune.

How ironic it is that to rebuild your credit you have get more credit cards. Have I learned my lesson? Yes.

Can I guarantee that I will always be employed? Will they continue to check my credit report and target me? Yes.

So don't blame people for getting lost in the game."

And my last words:

"Yes, banks try to get you to sign up for their credit cards and lines of credit.

They are selling a product that they intend to make a profit on.

If you choose to take them up on their offer, that's fine. It's your choice.

But even then you are not forced to use their products.

My website and many others try to steer people away from the overuse of credit for just the reasons you mentioned.

Nobody can guarantee you won't loose your job, get sick and not have enough insurance or run into other problems too numerable to list.

But none of us can put a gun to your head and force you to cut up your credit cards and live within your means.

All of us have to act responsibly. If we don't we have to face the consequences. There is no other way around it."

In my opinion this person needs an attitude adjustment.