19 Mar Debt: Last American Taboo?
Being in debt — and particularly if you can’t pay — might be the last real taboo in America. With marital counseling on Dr. Phil and sex bragged about on MySpace, there aren’t many taboos left for Americans. We’ll talk to almost anyone about the most intimate things — except debt.
Every bankruptcy lawyer is familiar with the problem: We are the financial equivalent of the VD clinic. A lot of people need our help and no one wants to talk about it. Almost every person who files bankruptcy asks who will find out they had to file bankruptcy because they fear discovery or they think they’re the only ones who have to go through it. And debt collectors thrive on this fear.
Being in debt is very American — Thomas Jefferson called his debts “a miserable arithmetic” and was unable to avoid the sale of his home to pay debt after his death. But being unable to pay it back implies a moral lapse — despite the fact that debt has been a constant feature of American life since Jefferson’s day. Bankruptcy is considered synonymous with failure. Since a large share of bankruptcy cases — and inability to pay debt generally — is triggered by events beyond our own control, this is like blaming yourself for building a house where a tornado might hit it. So people shoulder unbelievable debt, quietly suffering in secret to avoid admitting they “failed” — admitting they were hit by a tornado.
Even if you have spending problems — you’re a shopaholic — the question is still whether paying back several times the amount you spent in interest and charges makes sense. Are you trying to do so to punish yourself? To avoid the shame of admitting how bad things have gotten? Punishing yourself and avoiding shame are often worse than the original disease — and if you support your family then it’s not just you along for the ride.
The Internet has finally opened the doors for regular folks to overcome these inhibitions. If you are in debt and reading this blog, then you probably know exactly what I mean. The crucial thing to understand is that millions of families have filed bankruptcy and millions more need to do so. The question is whether this last taboo will stop them from considering and using a powerful tool to rebuild their financial home after the debt tornado has passed through.
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