Stigma is defined as a “mark of disgrace associated with a particular circumstance, quality, or person.” Most of you know that I am a paralegal, turned homeless shelter director / volunteer manager, turned paralegal (round two). Those two vastly different, and yet very similar careers, allowed me to witness the stigma associated with these very real human issues.
I began to do bankruptcy work around 1993. My first reflection of how bad the associated stigma is happened just a few months later when I overheard someone (in public) talking about an individual who had filed a bankruptcy and how “running up debt just to write it off” should be against the law. In fact, they used to publish the “filed” bankruptcy cases in the newspaper. There are so many different things wrong with those scenarios but I will stick to my opinion, based on the clients I have personally worked with over almost thirty years. I have never worked with a client that just thought it would be amusing to amass a large amount of debt and play a game of bankruptcy challenge. Yes, bankruptcy is challenging. Likely the reason that people either put off filing or don’t file at all. It is also buried in stigma, in spite of the fact that it is legal and a humane way for people to recover from financial ruin. What would make it easier?
It’s imperative to have a competent and caring attorney, that has staff who are willing to listen and understand where you are in your journey. Honestly, unless you broke the law, it doesn’t matter how you arrived in your current place. Call it hand-holding or whatever you’d like, it is imperative. While it is important, for you, that you determine a future path that doesn’t send you back to bankrtupcy court, your current reality should be handled compassionately. Whether you’re reading this while considering filing a bankruptcy, or you are a bystander interested in why bankruptcy happens, you should take time to read what the law says about filing a bankruptcy case?
Article I, Section 8, of the United States Constitution authorizes Congress to enact “uniform Laws on the subject of Bankruptcies.” The Bankruptcy Code, which is codified as Title 11 of the United States Code, has been amended several times since its enactment. It is the uniform federal law that governs all bankruptcy cases. But why does it exist? Why is it important?. . . . The fundamental goal of the federal bankruptcy laws enacted by Congress is to give debtors a financial “fresh start” from burdensome debts. The Supreme Court made this point about the purpose of the bankruptcy law in a 1934 decision: It gives to the honest but unfortunate debtor…a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.
Note the language “honest but unfortunate debtor” because that has been my experience with clients. People who have worked their entire lives only to make one bad financial decision; people who lost long-standing, lucrative careers, to be permanently laid off when our economy took a downturn. Most of the time, people who [I will say] were further along in their financial stability, have already spent their savings and retirement accounts, to continue paying their debts, before it occurs to them they have the reasonable choice of bankruptcy. Other times it is individuals who weren’t provided solid lessons about finances, or students that were afforded multiple credit cards in college. Divorce can cause bankruptcy, when one partner is left with more debt that they can absorb. Now, ask yourselves, do you know anyone who has gone through one of these life circumstances? I bet you do. If you’ve never been in a compromised financial position, you are so fortunate. That said, why not stop and think before you attach a stigma to someone because they need have come to a bump that will require them to file a bankruptcy in order to stabilize their life? Be the caring humans that I know you can and think before you speak!
Note: this post is about individuals filing bankruptcy to regain their lives – not large corporate filings (though they also have a legal right to file).
If you NEED to file a bankruptcy, or determine if doing so might help your future, I encourage you to reach out to a competent attorney. If you don’t immediately love the staff – look elsewhere! It should cost you NOTHING to have a consultation and it could save you so much in your daily life. For those of you who believe that bankruptcy should not be a “thing,” I respect your opinion about the matter but I also encourage you not to tear people down but, instead, to lift them up in whatever positive way that you can.
As for the stigma comparison between bankruptcy and homelessness. That is a post for another day. . . . . . .
This blog contains legal thoughts but is not to be mistaken for legal advice under any circumstances. If you need legal services, please seek an attorney licensed to practice law in the area you require services. Written by: Sharon P Blythe, NCCP
Nana Reflections 