Sep 01 2006
Going For Broke
I was scouring through my usual web news pages when I ran across this article about bankruptcy:
Newsweek Article: Going For Broke
For those who may not know, my ex-wife and I filed for bankruptcy right before we got divorced. We simply had too much debt and it would have complicated the divorce proceedings (so said my lawyer). I remember the second session with my divorce lawyer as he was gathering up all my information. When you file for divorce, you basically have to state all the assets and liabilities (debt) that you and your spouse have. The debt is supposed to be split unless something was acquired before the marriage. In our case, the lawyer said that the judge would probably block the divorce unless we agreed to settle the debt somehow or declare bankruptcy.
Looking back on things, I remember how horrified I was when the “B” word came up. I felt very depressed to think that my life had dipped so low financially that this option even had to be considered. After a lot of soul searching and asking a lot of questions, I decided to go full steam ahead with it. I’m glad I did since now I don’t lay awake at night wondering how I’m ever going to dig myself out of that hole. Since I got my bankruptcy, the laws have changed dramatically. My debt was totally discharged (student loans are exempt) which means I don’t have to pay a single penny of it back. Today, you have to pay it back albeit at a very reduced rate. It went from helping to get rid of the 100 pound gorilla on your back to putting him on a serious diet.
We, as the tax payers of this great country, invest unfathomable amounts of money into our education system. They can teach us math, history, science, english, the list goes on. They can’t teach us fiscal management, self control, financial planning, and so on – or can they? Our culture doesn’t seem to grasp the reality that currency only comes in finite amounts and is not split evenly among us all. That being said, the logical thing to do would be to find any way possible to conserve as much of it as we can. We all know just how logical we all are, right? Yeah…right!
People, no matter how conservative and logical their spending may be, do get into trouble. The article points out that many people drown in medical debt or lose a good job. The medical part is a whole other discussion for another day. As for losing your job, my guess would be that is where people get comfortable living their lives at a certain level and then suddenly can’t deal with the fallout. I see people every day who drive very expensive cars, have the best clothes, a house a king would be proud of, etc. Do we really need the best of everything? Is the best really the best for us? There are plenty of items you can buy at a premium price, but are they truly worth the extra money when there are comparable alternatives for a fraction of the cost?
We have a long way to go in our society with learning the fine art of judicious fiscal management. I just hope we can learn enough from our mistakes so we have some kind of a future left for our children.