Since 1995 I’ve done several thousand one-on-one phone consultations with people in all stages of financial distress, many of whom were desperately attempting to resolve their financial challenges without resorting to bankruptcy.
What do you think is the # 1 reason why people wish to avoid filing bankruptcy? Do you think it’s because bankruptcy would …
- Complicate their financial situation further (i.e. forcing them to sell their home or some other valueable asset).
- Affect their security clearance.
- Affect their professional licensure.
- Make their financial situation public for anyone that wants to know.
If you guessed any of these you would be wrong. Without a doubt, the # 1 reason why people wish to avoid filing bankruptcy is because they acknowledge that they owe the money and they want to (attempt to) pay it back.
Whether it’s because of their religious beliefs or just their personal moral convictions, the vast majority of people that I’ve spoken with over the years acknowledge that they owe the money and feel very badly about their inability to pay it back as originally intended. In other words, even though they now find themselves in a difficult financial predicament they still want to do the right thing and pay back what they can, even it’s for less than full balance.
I mentioned this to my wife the other day, and even she was genuinely surprised that this was the # 1 reason. But it’s the God’s honest truth.
Sure, there are the so-called “professional deadbeats” and scam artists that don’t pay their bills, but these people are the small minority. My experience has been that the overwhelming majority of people in difficult financial situations are good, honest people that acknowledge their financial obligations. But because of certain events that have transpired in their lives it might be extremely difficult, if not mathematically impossible, for them to repay their debts.