Chapter 7 bankruptcy discharges debts, wipes them out. We have all been taught to pay our bills. We are told it is wrong not to pay back what we have borrowed, used, spent, money that we promised to repay when we borrowed it.
This is the message of our culture, whether it was money to buy furniture, a car or truck, a house, a vacation, a student loan to get through college, or a loan from a friend or relative. We are supposed to pay it back as promised, or, at worst, when we can.
Well, I always tell clients that they can pay everyone after they file, if they win the lottery or otherwise come into money. Filing bankruptcy does not prevent you from paying your debts, it gives you relief from oppressive creditors.
It is also part of the Judeo-Christian ethic to forgive.
Most, if not all, of us would rather be in the position of forgiving a debt owed to us, than seeking forgiveness of a debt that we owe.
It is that pride thing. Well, with over 15 million Americans out of work, over 15% unemployment in my home state, lots of us cannot pay our debts as we promised. By the time people contact me, they have lost the ability to repay on time.
So, the question is, what to do about it?
There is tremendous guilt in the people who contact me. “I never planned on this.” “I never thought I would be thinking about this.” They do not even want to use the word “bankruptcy.”
The book of Deuteronomy speaks to these points: “At the end of every seven years you must grant a remission. Now the nature of the remission is this: every creditor who holds the person of his neighbor in bond must grant him remission; he may not exact payment from his fellow or his brother once the latter appeals to Yahweh for remission.”
In lieu of direct appeals to Yahweh, we have bankruptcy courts, established by Congress as required by the Constitution. The sad fact is, those who file bankruptcy do not have a choice, they do not have the means to repay their bills, it is not as if the creditors get paid if they do not file.
It is not fun, but bankruptcy is legal, and, more importantly, it is moral and ethical.
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