Sunday, February 10, 2008

Declaring Bankruptcy?

Since I ranted already today, I thought I'd continue with declaring bankruptcy. On the savingsadvice message board, there is a woman choosing to declare bankruptcy. I'm okay with that because she has a lot of bills she cannot seem to pay.

However, she writes about declaring bankruptcy here, but in her post she says "At this point my expenses are really low – cell, student loan, cable bill, food, braces and riding lessons for dd, that’s it. I bring in more than enough to pay all those, pay myself (envelope system) put some in retirement and still have some walking money. So right now I’m doing so much better than I was a year ago. I really have to thank the hard hitting members of this board for that. It was difficult to face my debt, and hard to admit, but I’ve taken quite a bit of advice here, working the second job last year really helped also. "

Um, how can you declare BK when you still have cell phone, cable, braces, and riding lessons? That's a lot of fat in a budget. I am really upset that people like this can just declare BK and buy whatever they want obviously, live a pretty nice lifestyle (I don't have riding lessons), and still walk away?

Excuse me? Where's the personal responsibility for paying back bills you charged? Or paying off a care you choose rather than repossessing it? Where's the responsibility to pay back bills you ran up (medical, dental, etc) than just getting rid of them in BK?

Sorry but if still have cable, cell phone, riding lessons, etc, you aren't doing everything possible to pay off debt. And it's not the CC companies, doctor's office, etc fault. It's pretty obvious it's the person's lack of integrity.


DogAteMyFinances said...

Eh, it depends how much debt they have. If they have half a million in medical bills (one emergency surgery, or a week in the hospital), cutting the riding lessons isn't going to help.

Of course, once you file bankruptcy, the judge will make you cut all that (and retirement) anyway. I don't think it's necessarily lack of integrity that makes people declare bankruptcy over out of control medical debt.

I'm Grace. said...

I don't understand Dog's comments. If the woman files a Chapter 7, it is unlikely she will even see a judge. She will see a trustee who won't care about the cell phone bills, etc. And the trustee can't touch the retirement funds. (I'm assuming the woman does NOT make enough to trigger a forced Chapter 13--those standards are pretty high and most people who choose bankruptcy make less than that amount.)

Other than that, I don't know that one's failure to give up a cell phone or riding lessons means one lacks integrity--it really does matter how much debt one has, and the realistic liklihood that one's income will EVER be enough to recover.

Anonymous said...

The woman can not decide her fate: the court will. Hopefully, her atty will set her straight. If she is making enough money for retirement, cell phone and braces, she will NOT qualify for a Chapter 7. She WILL qualify for Chapter 13 and she will have to pay everything back 100%.
Anyway, it is not up to her. She gave up the right to her own life when she defaulted on her bills. Now, the creditors are in charge. You know, how the debtor is slave to the lender.
LAL-don't aggravate yourself over her. She can't even quote the correct expression:
A penny saved is a DOLLAR earned. NOT another penny. Yikes.
PS-if her name is not on the deed, how can her creditor put a lien on it? That's fraud. Obviously, she is not dealing with a full deck. Move on.

Living Almost Large said...

I have no idea about BK, but I am horrified to hear someone blithly declare bankruptcy, while still paying for things "I" consider luxury items.

And it's for an $11k repossessed car (on the thread), CC bills, etc. It's not for $500k in medical bills.

And even then there is room to pay back if she can afford a cell phone, student loan, cable, food, etc.

She is married and said her husband pays for the house and her name is not on it. I have no idea if it's protected or his assets are protected from her declaring BK. Some people did suggest that they could go after her husband, but I'm not sure.

I have to say I'm not sorry the creditors are in charge cinzea. Soudns like she deserves it.

Anonymous said...

I agree with you, LAL. Quite the example of lacking any sense of personal responsibility.


frugal zeitgeist said...

Hear, hear. I'm always astounded when I read about people way far down on the income ladder crying broke while hanging onto things I don't feel I can afford on a decent Manhattan salary: cable TV, manicures, cell phones (only reason I have a Blackberry is because my employer pays for it), and so on.

I realize that it's all prioritization, but it's hard not to be judgmental about people's priorities at times.

Living Almost Large said...

That's exactly how I feel. They get riding lessons and stuff I can't afford and can declare BK?

Fabulously Broke said...

That woman's story makes me sick.

I feel the same way as you about her situation. I wish I knew how much debt she has and how she got into it (via riding lessons, methinks)