Article Round-Up: Bankruptcy Edition – Frugal Confessions

Article Round-Up: Bankruptcy Edition

Hello Frugal Confessions Readers! I’d like to get your thoughts today on the issue of bankruptcy. Of late, as Crystal over at Budgeting in the Fun Stuff has voiced her opinion about, filing for bankruptcy has become less taboo and almost…a tool in your financial arsenal. Suze Orman discusses this option with her callers more and more, and bankruptcy filings have been on the rise.

Redeeming Riches talks about the ins and outs of filing for bankruptcy, including how much it will cost you. Wealth Pilgrim discusses how to declare bankruptcy and not lose your home equity, as well as the differences beteween a Chapter 7 and a Chapter 13 bankruptcy.

Credit Slips predicts that there will be 1.5 to 2 million bankruptcy filings in 2010, which is slightly more than the 1.45 filings in 2009.

As a person who grew up with both sets of her parents declaring bankruptcy within a few years of one another (ranging from family farm, medical issues, and poor decisions), I know the relief that I felt when the creditors stopped calling.  However, it makes me angry to hear about so many people dumping off their debt. What are your thoughts on this?

4 comments… add one

  • Been there

    A loan is a promise to pay. Unless your family is in totally collapse–enough to where you would be willing to give up absolutely everything (including your family treasures), then you are not honoring your commitment. Too many people go into debt without thinking and then when they become overwhelmed or it is no longer fun, look for an easy way out. Of course, there are some people who truly need help due to medical illnesses, deaths, etc. that deserve a helping hand–and should get one. But too many people today want the “entitlement” program–for instance their new house went down in value and now they don’t want to pay for a house that is worth less than what they owe. Would these same people be turning down the money if the house went up in value–I think not! I don’t think buying a house comes with a guarantee for appreciation in value. Another problem is credit cards–too many people live a lifestyle that is bigger than their paycheck and then they are surprised when it comes time to pay for it. I believe bankruptcy should be reserved for only the most desperate cases. Even if it takes you the rest of your life, you should pay your own debts and not expect society to bail you out. I know this sounds harsh, but it’s really hard to watch people getting a free pass while the rest of us and are trying to do the right thing. I know paying for a dinner that you might have enjoyed six months ago isn’t fun, but you decided to go out, didn’t you?

  • Hello Been There!

    Thank you for your comments and thoughts. I definitely lean towards your views, and though they may be harsh, you are right–you make a promise to pay. Thank goodness there is no more debtor’s prison! America would be filled to capacity:).
    Amanda L. Grossman recently posted..Article Round-Up- Bankruptcy Edition

  • Well, as I said in the post you were kind enough to link to, I understand bankruptcy for those that truly got hosed in life, tried their best, but just ran out of options. For everybody else, Been There summed up my feelings almost perfectly.

    If a person runs themselves into debt with stupid spending or they just decide they don’t want an upside down house, then too bad. They need to put on their big girl panties and big boy boxers and suck it up.

  • Aurora

    I totally agree with the other commenters… I know someone who knew he was going to have to file for bankruptcy so he purposely spent like crazy on all his credit cards to max them out right before doing so… it made me sick to hear about it!

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