A Cavalier Attitude Towards Bankruptcy . . . By A Former Debtor (And Senator)
By Jay Fleischman, New York Bankruptcy Lawyer on Oct 10, 2007 in Bankruptcy Practice and Procedure, General Bankruptcy Information
From the Huffington Post: Mike Gravel served in the Alaska House of Representatives from 1963-66, and as Speaker from 1965-66. He then represented Alaska in the U.S. Senate from 1969-81. He served on the Finance, Interior, and Environmental and Public Works committees, chairing the Energy, Water Resources, Buildings and Grounds, and Environmental Pollution subcommittees.
Now, Mike Gravel wants to be the President of the United States.
Senator Gravel also filed for bankruptcy. So have millions of other Americans.
Why does this trouble this writer, a bankruptcy lawyer for over a dozen years? Because Mike Gravel, in a video statement, seems to indicate a lack of forthrightness in his own bankruptcy.
It all stems from a Presidential debate which Tim Russert recently moderated. Russert confronted Senator Gravel over his bankruptcy, to which the Senator replied, “I stuck the credit card companies with $90,000 worth of bills and they deserved it because I used the money to finance the empowerment of the American people with a national initiative, so you can make the laws.”
Gravel got called on the carpet for that statement, and rushed out a video statement in an attempt to salvage his campaign. Perhaps it’s a case of further glibness, but Senator Gravel indicates that his own bankruptcy excluded his personal credit card debts. He states that his bankruptcy was brought on by a “bad health year,” as well as due to debts racked up by his Democracy Foundation. During Senator Gravel’s video statement he indicates quite clearly that he “kept his personal cards and didn’t put them into the bankruptcy.” In fact, he took the credit cards used for the Foundation and put only them into bankruptcy.
People listening to Gravel’s statements may be led to believe that omitting your personal credit card debt from bankruptcy schedules is somehow permissible. They may also be led to believe that the cavalier attitude of a former bankruptcy debtor is the one held by a majority of other debtors. To these people I respond that both are wildly incorrect. First, and I’ve already established this, the law requires you to list all debts. Period. End of story.
Second, I can attest to the fact that not many debtors are filing for bankruptcy in an effort to “stick it” to the credit card companies. Rather, they are honest people who have fallen on hard times and have no recourse but to walk down the path that ends in the bankruptcy court. They do not go lightly to bankruptcy, looking to “stick it,” to the credit card companies. These people are ashamed, upset, and feel as if they have failed as human beings. They recover and eventually see bankruptcy as the release valve for their debt burdens, but at no time do they come into a lawyer’s office with vengeance on their minds.
For Senator Gravel to indicate otherwise is ill-conceived if not ignorant. And a willful failure to disclose all debts in bankruptcy would have led to prosecution had the debtor not been a former Senator.
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