“Stigma” of bankruptcy filing
Most people are very reluctant to even consider the filing of a bankruptcy to resolve their debt problem. Their concerns are not financial (such as the possibility of losing assets or budgeting issues) but instead are emotional. These emotional issues seem to increase with the age of the individual considering the filing; the older the person, the more concern over the thought of even filing for bankruptcy.

This stigma is perpetuated by many different sources. Although the credit industry may be partially responsible (with name-calling such as “dead-beats, etc...) society in general and semantics play a significant role. For example, we use the word “bankrupt” to negatively define many different situations, (i.e. bankrupt morals; bankrupt society) and this negative connotation easily transfers to bankruptcy law. This is an unfortunate transfer, because “bankruptcy”is a neutral term that refers to nothing more than a set of Federal laws that allow individuals, businesses, and other entities to shed oppressive debt to allow them to start over.

In reality, bankruptcy law is and should be seen as a positive procedure to assist individuals out of a situation that otherwise could result in very negative consequences. Would society rather have an individual burdened with massive debt search for drastic solutions to protect his family from garnishments, levies, foreclosures, repossessions, etc..., that threaten family life and basic survival? Or would society be better served by an efficient, methodical procedure that gives individuals a dignified” way out, allowing them to preserve their basic life-style while re-establishing themselves? When seen in this light, it becomes clear that bankruptcy is not a negative procedure, but instead a positive, life affirming concept that benefits all concerned. Yes, it’s true, credit card companies (that usually compromise a large percentage of the debt) might disagree. But this cost of doing business is a necessary release mechanism for those individuals who genuinely find themselves with no other solutions and no other way out.

Those people now considering the filing of bankruptcy should think about those people who considered divorce 20 to 30 years ago. What did society think about divorce back then? People chose to stay in terrible relationships with abusive mates just because the concept of filing for “divorce” was considered a “bad thing.” Today, the concept of a “divorce” is neither considered good nor bad. Instead, It is considered to be a neutral procedure necessary if conditions mandate its use. Would someone choose to stay in a terrible marriage with an abusive spouse because of the “stigma” of filing for divorce? Why, then, would someone choose to stay in a terrible relationship with horrendous debts, when there is a neutral bankruptcy law ready and able to assist them with a fresh start?

It is now time that individuals see bankruptcy law as it clearly is. If debts have been incurred that exceed their ability to pay in a reasonable period of time, the “stigma” of filing should not be used as an excuse not to file.