Through my Twitter feed came a link to the pro’s and con’s of filing bankruptcy from the business section of the Chicago Tribune.
Good chance to see how non lawyers see my world, I thought.
Bankruptcy was all about protecting “stuff”, said the writer, and the choice of chapters is driven by the kind of “stuff” you had.
Chapter 13 is for people who have equity in their property; Chapter 7 is for people who have little and can’t meet their basic expenses, the article went on.
I could quibble about the dichotomy that’s set up that Chapter 7 filers have nothing and Chapter 13 filers have more. (Often, it’s the other way around).
I further contest the implied suggestion that the Chapter 7 discharge is broader than Chapter 13. (It’s not. In fact, the Chapter 7 discharge is a bit narrower. It’s just quicker.)
But my real beef is the characterization that bankruptcy is about your stuff and how to keep it.
Not so, in my view.
Bankruptcy is about people, not possessions
Bankruptcy is all about protecting lives. Sometimes it’s about giving up “stuff” and getting back your life.
It’s about not paying forever for bad luck or bad choices. It’s about freeing up money to provide for your future. It’s about freeing up mental energy to do something beyond juggle too-little money, subject to too many creditor claims.Considering bankruptcy is a chance to evaluate what’s really important and what’s possible.
Sometimes, stepping back tells you the house is worth struggling for. Sometimes, in the big picture, the house is really a dead weight on the important parts of your life.
Bankruptcy is about starting over, or reorganizing. It’s about recognizing reality and doing something about it. It’s about being an activist to take back your financial life.
Stuff be damned.
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Hold or fold? is bankruptcy the right choice?
@cathymoran
Image courtesy of mojmir_ch.
Thumbs up! I agree, and the sooner we citizens recognize the truth in what Cathy says, the sooner we can address the defects in our Bkcy Code that hamper the fresh economic and social start. We need to allow cram-down and modification of residential mortgages, we need discharge remedies for student loans that is both realistic and compassionate (and there are more, but we’ll address those later).