The Hard Way . . .

I caught this article the other day, and I'm still amazed at how hard-headed and, well, dumb these people are.

Quick summary: four person household, $106,000 in GUC (general unsecured debt), no major assets. They spent five years funneling $2,000 a month through CCCS to pay off their debt.

Several family friends recommended that they file for bankruptcy. That was out
of the question, Russell says. "We were committed to paying off our debts."
They also resolved to continue to tithe and home-school their daughters.

Now, without knowing the exact details, I can't be sure of where they would fall on the bankruptcy continuum, but I image it would either be (a) a Chapter 7, or (b) a low-payment Chapter 13. Under federal law, they would be able to continue their tithing, and the extra educational expenses from home-schooling can be included, to a limited extent, under the Form 22 means test.

So, this couple spends five years scrimping and saving, working two jobs, the husband rarely seeing his family, just so they can get out of debt. While admirable, it is also silly and ignores the point and policy of bankruptcy law. It would be the equivalent of cutting down a redwood with a handsaw, or tunneling through a mountain with claw hammer. Sure, it is possible, and it is one hell of an achivement, but why would you do it?

I get really tired of people who look down on bankruptcy. It isn't theft and it isn't a moral failing. In life, things happen that you can't control. For that family, medical bills and indiscretions killed them financially. So, Congress, in its infinite wisdom, has provided a way out of debt, for a fresh financial start. They then chose to ignore that start and go the hard way.

There's a term for that: pride. Also, masochism.

Now, as a bankruptcy attorney, I have a somewhat cavalier attitude toward the entire process. However, I can't help but wonder what the family could have accomplished had they filed bankruptcy, then put for that same effort toward rebuilding their credit and for the health and welfare of their family.

For starts, the could have likely paid off at least half their mortgage. Or, the could have greatly improved the quality of life for their friends and family.

Bankruptcy is designed to help people. It really bothers me when people look down on the helping hand and benefits of bankruptcy. In my own experience, I've done more good for more people in bankruptcy than I ever did volunteering in college or working in family law in the Domestic Violence clinic in law school.