A READER WRITES ABOUT BANKRUPTCY
Lori Z. Bahnmueller
Michigan Credit Union League - Your Money Matters
A letter recently arrived from a reader in Roseville, responding to a column I wrote about bankruptcy. Despite the good economy, bankruptcies are rising rapidly and give me a feeling of concern about the long term financial stability of America. If we see over a million bankruptcies a year when times are good, overtime is high and unemployment is low, what will happen when the economy slows down?
Bankruptcy was designed to give a second chance to people awash in debt who simply can't make it. Today, however, bankruptcy has often become a cynical strategy for individuals and businesses to avoid paying legitimate bills. A disturbing trend being reported by credit unions and banks is that people who aren't even past due with their bills are declaring bankruptcy without trying to make a sincere effort to pay them.
That is why a letter like the one from the reader is Roseville is such a welcome change. She writes: ?I read your column regularly in the Macomb Daily and enjoy it very much. I wanted to write after your most recent column regarding bankruptcy. My husband and I were considering bankruptcy as an option very recently. We are deeply in debt and are struggling to make ends meet. Our total obligations exceed 50% of my husband's annual income and we were very panicked.
*After much consideration we decided against declaring chapter 7, for many of the reasons you listed in your column. Also, we feel very strongly about paying back the money we borrowed. We were given loans in good faith, we accepted them and we want to make good on our word.
*We considered several options, including whether or not I should enter the work force. Unfortunately, after spending the last several years at home with our small children, most of my skills are outdated. So my husband and I put our heads together and came up with what we believe is a better way.
*I have applied for and will receive financial aid, and I will be returning to college in January. I am pursuing a degree which, when completed, will enable me to not only pay back my obligations but help provide a better life for my family. It will take more time, (and more interest on our accounts) but it will be done.
*We have consistently kept up our payments and are not behind on any of our accounts. Very often we can only make the minimum payments, and that may be the case for the next few years while I'm in college. But after reading your column, I am convinced we are doing the right thing.
*Thank you. Your column is always interesting and helpful. Please keep up your work.?
A letter like that in encouraging not only to me but to honest people throughout our system. Remember, trust is a critical factor in the operation of an economy. Stockbrokers accept orders to buy or sell millions of dollars worth of securities over the phone with nothing signed. Neighbors lend tools, salesmen accept orders, merchants extend credit and we trust each other in a thousand ways every day. There can never be enough policemen to force everyone to be honest. People have to do the right thing because they choose to.
As much as we hear about crime, the fact remains that most people are honest most of the time. That is how a society can function. Thanks to people like that family in Roseville who accept their responsibility to make an honest effort to repay their debts, our economy and society can continue to flourish.