Why Not Bankruptcy?
Here's a question for all of you....
Why not bankruptcy? Let's say you have $60,000 in debt and can't find a job that pays enough to cover more than minimum payments, etc. You feel like you're always taking 10 steps back and can't seem to find a way to get out and you've tried it all.
Why wouldn't you do bankruptcy, wouldn't that give someone a new start and able to take some of their hard earned money and actually do something with it.
Besides credit report, what downsides are there?
Just curious for people out there,
The Solutions Kid
Quote: take some of their hard earned money and actually do something with it.
Personally I think that is the most pathetic argument. (no offense intented, i know the post was just out of curiosity)
BK's IMO were designed for people to be able to take risks (start businesses), not for people to be able to buy a bunch of stuff then realize..."Oh no, I can't afford all this stuff I bought"
its ludicrous that our government will let people file BK for buying too many toys.
some people need to lay in their bed...dirty or clean
Reputation, stigma, ethics, morality, breaking promises....these come to mind and things that are wrong with BK.
I read a report one time that said most in the US congress have filed BK at least once in thier life. Of course we all know the standards/morals of most politicians
Remember, the politicians developed the rules of bankruptcy.
[addsig]
In my opinion Bankruptcy is like financial suicide: the coward's way out. People who will not do whatever is necessary to honor the debts they have incurred. Sometimes it would require to just talk with creditors and make at least some kind of payment, normally creditors are willing to work with a person as long as a person is communicating.
To declare bankruptcy somehow indicates a person who doesn't have a lot of regards towards others. Only when there are compelling reasons, and events way beyond a person's control, bankruptcy may happen, but those are rare.
People should have a sense of honor and honor the debts they have incurred.
Ladybug
Bankruptcy....
Do what you need to do...
If you can pay the minimum req. payment to keep yourself in good standings do it...
If you are thinking there is relief or a new beginning on the other side....think again...its another side of where you currently are...
If you're thinking of it in the sense its your ticket to becoming wealthy in r.e. investing...you dont need money to do this....just a different thought pattern...
We all think of a way out....why not think of ways to stay in it and go forward and beyond....
There you got my rant....
I am glad to see so many RE Investors with high standards and morals. Keep up the good work (motivating others to become the best investors and people they can be).
File a bankruptcy if you need to.
Just make sure you understand allof the ramifications.
Nevermind that moral stuff.
Do what is best for you and if that means BK, then do it.. and go on with your life.
Disregard the self-righteous and moralists' rants. Their opinions are not relevant to your personal situation.
Just be informed about any decision you make BK or not.
As a young Marine I have very high morals and integrity. After 2 years of fighting with Visa and Ford, because I made some very stupid mistakes right out of boot camp, I filed for bk. Don't get me wrong I had other debt but those two were my main problems. Visa would not cut me any slack they just tightened the nouse. I also doubt Ford was really worried about the 15,000 that they lost in the deal. It is embarrising and I am fully aware that it was my fault I was in the situation I was in, however, I have learned a huge lesson from my past financial ventures and I will be a lot more cautious with how I spend my 1600 dollars a month.
I am sorry if I disappointed all of you self indulgent individuals that think your rear ends smell like roses but I had to figure out how to feed my infant daughter not how to appease some executive at Visa that thought his money was more important than my family. Feel free to reply gentlemen I would be happy to speak with you.
I posted this topic just out of curiousity and I am not too surprise to read what I have.
I agree with the moral aspect, etc but it is so much easier to speak from the top and speak on a soapbox (trust me I know than be in someone's shoes. I don't think it shoud be abused, but when people I have met are really trying to make it and they made some really stupid mistakes and need a fresh start, then this is the answer.
If you learn from what you did and don't do it again, then it makes sense. Sometimes it can literally feel like the weight of the world is on top of you and you have no where to turn. Sure, you can try to get another job, but that's easier said then done. Sure you could go out and flip properties, but truthfully when you are starting out and don't have money to even buy books, that's hard to do.
There is nothing to be ashamed with filing BK at all, IF you really, really need it. It's like the old adage, "you do it once, shame on you, do it twice, shame on me"
I like Mr. Kiyosaki for some things, but what I really like is when he said that all people should learn how to run finances, balance checkbooks, and know how to read a balance sheet. It's sad that we grow up really not truly understanding credit and money, which is why the credit card companies drown college freshmen as soon as they get in there...because they know they don't know any better.
Good luck all....
The Solutions Kid
[addsig]
Quote: Disregard the self-righteous and moralists' rants. Their opinions are not relevant to your personal situation.
I could have sworn that the topic "Why Not Bankruptcy?" was just looking for opinions.
BTW...us "self-righteous and moralists'" are also call honest...if you sign you name and agree to something YOU are WRONG when you don't do it.
Don't get confused, you seem to have been brainwashed into thinking that "I didn't buy all that stuff that I defaulted on"...get your boots people.
I am not better than anyone, nor am I worse than anyone. Bankruptcy has its purpose. I do not think that bankruptcy was intended for any able-bodied person with a good job who has a problem with spending OPM. IF YOU LIKE OPM, PAY THE S**T OFF!
I have been on welfare, I have come close to BK. Instead I wrote a consumer proposal and showed a willingness to make good on my signature. I could have wrtten off over $100,000.00 in debt, but do you think that I could show my face in a financial institution again? There are the people that are going to take the "Easy Way" out. Those are the people that will always fail in life. Next time you see a post by Stockpro99 on this board, read the Kiyosaki quote he has in his signature. Makes so much sense.
Despite what everyone says, that in some instances it is OK to file BK, I still do not agree, even when you have kids to feed.
I have been in very serious financial trouble, none of my own doing, but because of circumstances way beyond my control in the country I was living (like revolutions, frozen banks, plundered supermarkets, etc.), and with very little cash in my purse. I was a divorced mother with 2 kids to feed, protect!, clothe and pay tuition for their schools, books, etc.
And now, about 15 years later, here I am in the USA, I am facing quite some financial problems caused by somebody else, but I am also responsible for payments to the various creditors. For one thing, here a person has many, many options to make money, which doesn't exist in other countries!. I make money translating in Court, for lawyers, hospitals, etc., this is free-lance, thus irregular income, but income nevertheless, and I am doing CREI, the most important part for me, to create revenue, starting with almost nothing, saving my income from translations, and from a booth in my daughter's fleamarket, to have the money to buy a house Sub-2. And I have bought houses, since I started in June this year.
What I am trying to point out is that everybody should feel greatly blessed to be living in this great country where about everything is possible to create income, either straight from a job or being self-employed (includes CREI).
This is the only country I know where you can have multiple jobs, in other countries that is NOT possible, the government won't allow you! That is in Western countries, like Europe, S.America.
Looking at all that, the possibilities to create income and be willing to do so, should make it unnecessary to file for bankruptcy. It only requires determination, perseverance and integrity.
Ladybug
Fun Post!
My gripe is when people declare bankrupsy, but keep their Big Screen TV, Cable, High speed internet, Boat and Car (if they can or are already paid for), etc. You get my drift.
I think it's good that people can declare bankrupsy rather than be sold into slavery (most of the time) but I think it's way too easy for people to do and the social consequences are very high because of the number of people who do file.
My Grandfather started working at 14 years old. 30+ years in a mine in Alabama. He died from cancer of the mouth (spread to the brain) because they had to chew tobacco while they were down there so long to help survive the conditions. Why? because he honored his word. What sort of example would he have set for my Mom if he filed bankruptcy?
I am not "preaching on a soapbox". When my wife and I got engaged, we both worked two jobs. I worked from 9am-7pm and then from 1am-5am and did side jobs also. My wife worked 8:30am to 4:30pm and then again from 1am to 5am. We rented the cheapest apartment we could find in a very bad part of town. She was scared to go out on the deck at night. The police cruised the complex all night because they were always arresting people there for drugs, battery, etc. We did this to save for our first house and pay down my credit cards and her car loan. Now we buy and sell cars and ebay stuff, whatever we can do to get this debt gone the right way. Plus hold down 8-10 hour/day regular jobs. Why? Because I ran up a lot of debt in my 20s. My business failed when I almost died in a car accident (was life-flighted to the hospital and unconcious for two weeks). I could have filed bankrutpcy at any time and would have had all the "moral justification" in the world to do so, but did not. I was also in the Marines before that. There were Marines in my unit that had second jobs to pay for their family because the military just doesn't pay well. They didn't make excuses. They made solutions to their problems. "Opportunity often disguises itself as hard work". No one should ever file BK unless they cannot work for some reason like a really bad health problem or the like. McDonalds always has a "help wanted" sign up.
Did you ever notice that people from Eastern Europe come here for 5 years with no credit history or anything and are often better off than Americans that have been here for 30 years and have 30K in credit cards? Why do you think that is? They PAY CASH for their cars and buy their stuff from Thrift Stores and Garage Sales and work two jobs if necessary to get ahead. It is because it never occured to them to run up a bunch of debt for cars, clothes, nights on the town, etc. and then stiff everybody that trusted them. They are thrilled to live in a land of such great opportunity and freedom. Like my Grandfather. The idea never crossed his mind. You live within your means. If you cannot do this, you honor your word and fix the problem with as much effort as it takes. No excuses. Your word is the most important thing you have.
I sold a car to a lady the other day and forgot my garage door opener. I arranged to meet her at her house to get it back. Her house was 250K+. Her TV took up a whole wall of her house. She had everything decorated with 10s of thousands of dollars worth of stuff. She bought the car from me with cash because she had just filed bankruptcy. She was thrilled that she was able to legally steal all of the stuff she had and told me how great if felt to be "debt-free". It is theft. No matter how you spin it. She kinda liked having to live within the budget of her paycheck. It only cost the people that trusted her $40K+ for her to learn this lesson. I believe what Mr. Kiyosaki says. We do need to be better educated in managing our finances. But that IS NOT an excuse. It is NOT SOCIETY'S FAULT that people go out and run up bills they never pay. It is not the government's fault. It is not our educational system's fault. It is not VISA or Ford's fault. BK is legal theft.
Anyway, we just bought our first investment property the conventional way (IE:Mortgage from the bank). The owner had to have cash quickly and I didn't know another way without ripping the guy off. I really want to learn more about doing creative real estate deals. I am trying to L/O the property now so I can put it aside and start looking for another one while I learn how to creatively finance deals. I would not have been able to finance this deal if I had filed bankruptcy. My credit is far from perfect, but I never gave up. I'm not there yet. I still owe about 10K to a credit card, but I will make it. I have to. It is the right thing to do. I sleep great at night.
JohnCl
I promised myself that I was going to spend less time on TCI but you folks are making it almost impossible!!
kr&p(t)-sE
Main Entry: bank·rupt·cy
Pronunciation: 'ba[ng]-("
Function: noun
Inflected Form(s): plural -cies
Date: 1700
1 : the quality or state of being bankrupt
2 : utter failure or impoverishment
The first known bankruptcy law was passed in England in 1542 to give creditors remedies (other than imprisonment) against debtors who did not pay their bills. Under this law, debtors were considered quasi-criminals. We have come a long way since then and it seem like bankruptcy has become the easy way out. I believe that bankruptcy is a tool that should be used by folks that have ABSOLUTELY no way out. For example a permanant disability. Having repossessed over 25,000 vehicles in the past 13 years, I get a kick out of watching someone driving a Mercedes Benz that has not made 6 months worth of payments and the minute that the repoman drives away with the car, they simply run to the attorney, file BK and the vehicle is returned and parked right where we took it from. 3 Months later when the BK is discharged and we are sent back, only to find the vehicle is gone never to be seen again. It's a JOKE!! Bankruptcy filings are at an all time high and are predicted to continue to climb for many years to come. I will leave you all with a thought:
Several years ago, I came to know of a woman with no arms and no legs by the name of Celestine Tate-Harrington, who was born with Arthrogryposis multiplex congenita, a birth defect of the muscles and joint contractures. Celestine used a motorized gurny to transport herself to and from her employment. You see she was a musician that played the electric organ with her tongue on the Atlantic City Boardwalk to support her family and put her daughter through college. Yes you heard me right...NO ARMS NO LEGS! That is where she met Evander Hollyfield, who assisted her in the publishing of her autobiography which she typed entirely with her tongue, Some Crawl and Never Walk, which was published in 1995. In this book, Celestine describes the difficult life she had lived, including her disability, being abandoned by her mother, her fight to keep her daughter, and how her faith kept her going. Her story has inspired many people. Guess what? She paid all of her bills and put her daughter through college!!! Here is a person who could have and maybe should have filed BK but decided that her disability was not going to stop her from making a living and paying her bills!!!
Need I say More?
No Excuses!!
Repoman
[ Edited by RepoMan on Date 09/26/2003 ]
This subject was also covered in a similarly thorough fashion, with similar consensus, just a couple weeks ago.
I think we can all see that BK is outside the general moral bounds of this group, with probably a few exceptions.
I wonder what else this group has so much agreement on?
Best,
Brian
I hope to see you all in the same situation some others have been in. I know that is harsh to say but you are obviously too high and mighty to admit when you have made a mistake or two. Integrity is doing the right thing when noone is looking. It is not, however, keeping your word to a man who would probably sell his own mother to make a buck. You gentlemen should take a look around and decide whether you want to work 23 hours a day and neglect your family or admit you made the mistake deal with the consequences of the mistake, comit credit suicide for 7-10 years and learn from it. I am in no way condoning the theft by deception technique that people use to get the 250K dollar house and the mercedes but if you make the decision to file and pay the bills that you reaffirmed, you shouldn't be lable a theif or a tyrant. You should be labled financially challenged and not offered anymore credit.
I will not be accepting any credit extended to me but I am going to try to bird dog and occasionally flip a contract to save enough money to buy my first home. I will be paying cash from now on not asking for money that I don't have the means to repay. I believe I have said my peace now, I only think you shouldn't judge people because they fail or make mistakes. I do believe you should judge the man who is so quick to judge another. You high and mighty ones should take a step down off your high horse and be not so quick to judge.
Bankruptcy's purpose is to relieve an honest debtor and allow a fresh start. There are some instances in which a person will never be able to get out of debt. Uninsured medical expenses, sudden layoffs, etc. In many instances there is no realistic way for the debtor to pay back the debt in their lifetime.
The government does sometimes tell people they cannot have other jobs, as killenjw can attest to. hibby76, it doesn't matter if the assets of a debtor are paid off or not, they all go into the kitty to pay off debtors. State exemptions govern what a debtor gets to keep, boat is not one of them, at least in my state.
In response to why not, the reasons have all been stated, and they all have to do with ethics and reputation.
By the way...while the debtor bears the burden of falling into default, I don't completely relieve lending organizations of their responsibility. One of the reasons personal bankruptcies are at an all time high is that consumer credit companies are willing to extend huge amounts of credit to people who have no business with it.