By Ryan C. Wood
Howdy my fellow humans in this shirt. I hope it be better than yesterday for you. In the meantime, let us discuss how you should look at bankruptcy and your fellow humans or nonhuman entities corporations and limited liability companies that chose to file for bankruptcy protection each year. Why is there still a stigma about filing for bankruptcy?
What Are You About On This Planet?
Are you about helping your fellow human when things do not go quite right?
Are you about stepping on humans’ necks when they are already down?
Two Truths That Exist At The Same Time
1. No human or business wants to file for bankruptcy protection. No human or business began with the expectation that it would result in a bankruptcy filing. Bankruptcy will be better than the real world though, so it becomes a necessary choice.
2. No human or business wants to receive notice in the mail that a human or business that owes them money filed for bankruptcy protection.
These two things are true at the same time. Yet bankruptcy is still not bad; sorry stop taking one thing to judge our fellow human. You do not know. You do not understand. You do not get to judge. The Bankruptcy Code does not judge nor punish. Only your fellow human judges and punishes you for filing for Bankruptcy protection.
How Many Catholic Churches Filed For Chapter 11 Bankruptcy Due To Abuse Lawsuits?
Many, many more than you probably know. The Arch Diocese of Oakland filed for Chapter 11 reorganization due to hundreds of child abuse lawsuits due to priest’s abuse of children. If a church can file bankruptcy to try and get a better deal on child abuse lawsuits, humans should not feel bad about filing for bankruptcy to discharge debts from a failed business or running up too much debt to pay for consumer goods and services. It is just money or debt being discharged not related to any physical abuse of another human.
Benefits of Our Bankruptcy Laws: The American Dream
First and foremost, look across the globe and the economies of other nations. Is there a reason these nations do not have thriving expanding economies? Is there a reason someone that owns nothing of significance and does not make a lot of money cannot get credit to buy or do anything to better their life? Is there a reason thousands of humans legally or illegally want to come to the United States of America?
Yes, what all these countries have in common is no highly structured insolvency or bankruptcy laws.
Come the tired poor. Obtain credit. Make a better life. Contribute to the The American Dream equal to all. The Bankruptcy Codes says innovate. Open a business. Make a dream come true.
And if things do not work, generally no matter how things do not work out, the Bankruptcy Code is the net to catch you, wipe you off from the fall and encourage you to get back on trying to improve your life. You have learned a lot and gone through a lot. No one is a failure for filing for Bankruptcy protection. A human can be failure for giving up and not trying anymore.
It Was Not Always Likes This In The United States of America and There is Always More to The Story
So, if you do not know, you will not find the truth with mainstream media or publications. Real humans provide truth. We have a highly structured, most highly structured, insolvency laws of any country in the world. This has not always been true. But in 1978 the Supreme Court of the United States took the training wheels off extending credit, percentage rates, and in a roundabout way banks begin to offer high interest rates for credit cards and revolving credit accounts.
Marquette Supreme Court case (1978): This ruling allowed national banks to export their state’s interest rate laws to other states, even if those states had lower usury limits for interest rates. This opened the door for banks in states with higher usury interest rate caps to charge those rates nationwide. A few states eliminated their usury laws altogether allowing the big lenders to set up their credit card lending arms in these states and export whatever interest rate they wanted. Hello 24% interest for credit cards.
This is not all bad. This holding the Supreme Court of the United States allowed our modern economy to emerge over time. Now anyone in the United States can obtain credit to better their life, or a car loan, or a home loan. What is the interest rate? It is possible too much credit is being extended. There are many on-line lenders with instant money transferred. The lay-away system is coming back with Affirm and other companies. Pay overtime with the seller carrying the debt instead of using a credit card. Well, this used be how many humans paid for things prior to 1978 and after until credit cards took over. You could lay-away items at K-Mart, JC Penny, Sears and more stores. That all went away after 1978 and credit card interest rates being allowed to be higher. What is new is old and old is new.
We went from humans in the United States in the 1970’s having maybe one credit card to the late 90’s where a credit card application was left on ever seat of my college lecture hall to students with no jobs or income.
Why Does Your Fellow Human Choose Bankruptcy?
The simplest answer is they are tired of the struggle. Enough is enough right? How much must one suffer before filing for bankruptcy? Humans sell their jewelry. They try and get another job and work themselves to death. What is enough? What is your judgment?
Well the Bankruptcy Code does not judge and has a formulaic approach to provide equal results for similarly situated humans. Income, expenses, assets, debts and financial transactions leading upon to the bankruptcy filing. These are the inputs for the outputs. It works.
What is the problem?
It is my understanding that all religions preach helping your fellow human when they are down.
What does bankruptcy accomplish? Ask your bankruptcy attorney what they think? Bankruptcy ensures the equitable fair treatment of all parties involved. Whether the bankruptcy is an individual human or entity equitable treatment of all parties is the goal; according to the Bankruptcy Code. The orderly distribution of assets to those owed money. Order, no more chaos. Happy thoughts about a future without debt.
Apply your belief system the same to each issue. Race and gender discrimination takes one thing to judge a human. Do not let your one thing be Bankruptcy to judge your fellow human. It is no different than race or gender discrimination.
Credit Card Company Raised My Credit Limits
Yeah, and you did not even ask them to give you more credit. If things are going well with on time payments all credit card companies want you to carry a balance so they can charge interest. It is a delicate dance. Every bankruptcy attorney has probably heard this over and over again. Why did they raise my credit limit without me asking? So you could charge more and pay the credit card company more interest and they make more money.
Scams
Believe it or not, a number of bankruptcy filings are due to someone being scammed. Scammed out the thousands upon thousands of dollars by taking cash advances or giving authorization to a third-party that uses the card for some fake purpose; usually profit based. It is easy to think what were they thinking sending the money to someone they most likely did not really know in real life. I prefer to fault the scamster for bilking thousands of dollars, like $100,000.00 plus, out of someone by fraud. Once the human realizes they are scammed it is too late and there is no help out there to retrieve the money. If you are scammed, you do not have the funds to hire an attorney to sue the scamster, and the endeavor will probably be not be successful recovering the money. So, bankruptcy becomes the best, cheapest and fastest way to solve the problem and discharge the debt incurred due to the scam.
Loss of Job/Reduction In Business: Reduction of Income
Another main cause of bankruptcy is loss of employment or reduction in business, more or less a reduction of monthly income. There is no shame in being laid off from a job. There is also no shame in a reduction of business and resulting reduction in income. It is tough to run a business in California with all of the fees and taxes. At any time, something can happen to change things. I went by a dry cleaner the other date that was in business for years. I have to believe the increased traffic on El Camino Real in Redwood City is the reason for the closure of the business. It became nearly impossible to drive in and out of the dry cleaners very small parking lot. Redwood City over the last fifth-teen years has built many new office buildings and apartments. El Camino Real was not a parking lot in front of the dry cleaner’s business ten years ago. It is now and horrible traffic most of the day now. What did this business owner do wrong?
Market Decline in Home Value
Remember the mortgage meltdown and variable interest rate loans? House prices went through the roof based upon fraud? Well, some homebuyers at that time did noting
COVID
Whether you believe the COVID response was correct or not, the result of the shutdown is all too clear for bankruptcy attorneys. During COVID there was plenty of money propping up certain businesses and allowing them to stay open and unemployment to help people that could not work. It helped a little bit. But the short-term loss of revenue from shutdowns is still playing out for many businesses. Many, many businesses failed during COVID due to the shutdowns and people just not going out and spending money. There are still businesses feeling the impact of the COVID shutdown. The point is what did any of these businesses or humans do to have a reduction of business or income? Nothing. COVID was forced upon all of us for whatever reason and the response was the response. The result is the result. Our economy and country are lucky to have our Bankruptcy Code the help deal with the outcome.
Sickness/Medical Problems
This is always a rough category to discuss. I advocate for a special chapter of the Bankruptcy Code to be passed to specifically address bankruptcy with primarily medical debt. This issue arises for any number of reasons. From an eighteen-old kid getting into a car accident and the result if hundreds of thousands of dollars in medical debt as a result. Bankruptcy becomes the answer to that problem. I believe this is still true, but if you have medical insurance that covers part of the medical debt, then any part of the medical debt the insurance does not cover will not be written off by the medical provider. If you have no insurance at all, then the entire medical debt can be written off. I have had clients that are going to die that just want all their debts, some medical, discharged before they die. Like primarily business debt chapter 7 cases, primarily medical debt cases should also not have the the Means Test is not apply.
Humans Are Just NOT Perfect
The main reason for bankruptcy is all of us are just not perfect and cannot ever be perfect. Whether a bad business investment or trying to open a business to just overextending on credit and the minimum payments are too much now, we are lucky enough to live in a country that has the most developed insolvency laws in the world. It is part of our American Dream. Bankruptcy is the safety net for all of us when things just do not go quite like we wanted. Bankruptcy does not judge why you are choosing bankruptcy. I may need our bankruptcy laws someday. I sure hope not, but you never know what the future brings. A car accident, that is truly an accident, can change your entire financial life. A loss of a job will change your finances overnight.