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Photographer
R A V E N D R I V E
Posts: 15,867
New York, New York, US


Hello, why is Bankruptcy considered bad? This is just a question that I must ask because of how the state protects the debtor

From what I know: filing for bankruptcy means that people you owe money to (that haven't already filed a claim) CANNOT collect from you. Filing for bankruptcy shields one from creditors.

People that are already after you for money, get whatever is left after all your assets are liquidated. House, car, etc. basically the stuff in your name, emphasis on your name.

The outcomes are:
1. You basically have nothing on paper
2. You have limited access to capital because banks won't lend to you (with the bankruptcy being on your credit report for 10? years)

but with just $200 you can get a nice secured line of credit and build your credit score right back on up!

so maybe give me objective reasons why bankruptcy is bad, or WORSE than having people and corporations garnish your paycheck.

(and no this thread isn't about me or anyone)
Feb 19 13 05:58 pm  Link  Quote 
Photographer
ArtisticPhotography
Posts: 7,699
Buffalo, New York, US


Because you've ripped people off by not repaying your debts.
Feb 19 13 05:59 pm  Link  Quote 
Photographer
R A V E N D R I V E
Posts: 15,867
New York, New York, US


ArtisticPhotography wrote:
Because you've ripped people off by not repaying your debts.

is that really the social consensus?

Feb 19 13 06:04 pm  Link  Quote 
Photographer
Virtual Studio
Posts: 5,619
Toronto, Ontario, Canada


ArtisticPhotography wrote:
Because you've ripped people off by not repaying your debts.

hmmmmmm. Then again the interest they get from you is in part an acknowledgement that they are taking on that risk,

you're ripping off precisely no one if it's an interest bearing commercial transaction.

Feb 19 13 06:05 pm  Link  Quote 
guide forum
Photographer
GPS Studio Services
Posts: 35,490
San Francisco, California, US


Bankruptcy isn't something that is bad or good.  When not abused, it provides a way for people to have a fresh start when things have happened out of control.  Like anything else it can be abused, but it isn't bankruptcy itself, per se, which is bad, but the abuse which is.

It is not something you want to take lightly.  Doing so has a lot of ramifications.   On the other hand, if it is your only alternative, it might be the right thing for everyone. 

I just hate it when people run up debts intentionally just to go bankrupt and turn around to do it again.
Feb 19 13 06:06 pm  Link  Quote 
Photographer
Luke Ryan Photography
Posts: 580
Santa Monica, California, US


R A V E N D R I V E wrote:
Hello, why is Bankruptcy considered bad? This is just a question that I must ask because of how the state protects the debtor

From what I know: filing for bankruptcy means that people you owe money to (that haven't already filed a claim) CANNOT collect from you. Filing for bankruptcy shields one from creditors.

People that are already after you for money, get whatever is left after all your assets are liquidated. House, car, etc. basically the stuff in your name, emphasis on your name.

When you say "bad" to whom do you mean ?

Bankruptcy is generally considered bad for everyone, except lawyers, courts and mediators.

Bankruptcy is very bad for creditors.

However, if you are a BIG business in America that has strong labor unions then bankruptcy that is managed by the federal government is heaven.

If you are a BIG financial institution in America then bankruptcy managed by the federal government is heaven.

If you are anyone else then its bad.

Feb 19 13 06:12 pm  Link  Quote 
Photographer
ArtisticPhotography
Posts: 7,699
Buffalo, New York, US


Virtual Studio wrote:
you're ripping off precisely no one if it's an interest bearing commercial transaction.

If you go bankrupt, you're ripping ME off. It causes higher interest rates and the lending institution is out the capital. So yeah, it hurts you and me. Meanwhile, the bankrupt person converts all of their wealth to a Florida home, which isn't touched, and keeps a big chunk of assets. Even if they don't, they still can generally keep their house and car. Yeah, that's wrong.

I wish I would walk away from 90% of my debt. But I can't. I'm responsible.

Feb 19 13 07:09 pm  Link  Quote 
Photographer
R A V E N D R I V E
Posts: 15,867
New York, New York, US


ArtisticPhotography wrote:
If you go bankrupt, you're ripping ME off. It causes higher interest rates and the lending institution is out the capital. So yeah, it hurts you and me. Meanwhile, the bankrupt person converts all of their wealth to a Florida home, which isn't touched, and keeps a big chunk of assets. Even if they don't, they still can generally keep their house and car. Yeah, that's wrong.

I wish I would walk away from 90% of my debt. But I can't. I'm responsible.

not really, no. interest rates aren't like insurance

in the retail credit world, interest rates are high because the banks can get away with it

in the institutional credit world, interest rates are low because the banks and the fed manipulate them lower

meanwhile the profit margins are pretty awesome regardless

your insurance on the other hand, will go higher from other people's indiscretions

Feb 19 13 07:39 pm  Link  Quote 
Model
V for Victory Modeling
Posts: 436
Roseville, California, US


Both my parents went bankrupt at some point. My grandmother is one who considers it stealing, but bankruptcy does have ramifications. Major things like not being able to buy a house, rent (or put down a higher deposit) or get a loan on a car are major ones. Can they liquidate a car if it's owned by the bank and not you? They can't do much if you rent, but they can if you have any value in your house.

Don't forget you can easily be liquidated in bankruptcy too. My dad was able to get by it, because he didn't have much equity in his house when he bankrupted in 2008. Not sure about his car.
Feb 19 13 07:42 pm  Link  Quote 
Photographer
Cherrystone
Posts: 36,421
Columbus, Ohio, US


ArtisticPhotography wrote:

If you go bankrupt, you're ripping ME off. It causes higher interest rates and the lending institution is out the capital. So yeah, it hurts you and me. Meanwhile, the bankrupt person converts all of their wealth to a Florida home, which isn't touched, and keeps a big chunk of assets. Even if they don't, they still can generally keep their house and car. Yeah, that's wrong.

I wish I would walk away from 90% of my debt. But I can't. I'm responsible.

You really ought educate yourself, and if you have any beefs, direct them toward the corporate world, particularly the banking world and their bankrupt actions.

A huge chunk of personal bankruptcies come on from massive medical debt, not from deadbeat action.

Feb 19 13 08:21 pm  Link  Quote 
guide forum
Photographer
Justin
Posts: 21,753
Fort Collins, Colorado, US


Small Fruit Pits wrote:
A huge chunk of personal bankruptcies come on from massive medical debt, not from deadbeat action.

Over 60% by one statistic that I saw.

This is not a country where you can afford to get seriously injured or sick.

Feb 19 13 08:29 pm  Link  Quote 
Photographer
Bob Helm Photography
Posts: 18,176
Cherry Hill, New Jersey, US


Used as intended there is nothing wrong with it.
Feb 19 13 08:39 pm  Link  Quote 
Photographer
Luke Ryan Photography
Posts: 580
Santa Monica, California, US


Small Fruit Pits wrote:

You really ought educate yourself, and if you have any beefs, direct them toward the corporate world, particularly the banking world and their bankrupt actions.

A huge chunk of personal bankruptcies come on from massive medical debt, not from deadbeat action.

bankruptcies arent caused by medical debt, they are USED to discharge medical debt.

Feb 19 13 08:45 pm  Link  Quote 
Photographer
netmodel
Posts: 6,786
Austin, Texas, US


It's all about being dependability and reliablity. Since you filed bankruptcy, they view you as unreliable and not the person they could depend on for making money.
Feb 20 13 12:14 am  Link  Quote 
Photographer
Cherrystone
Posts: 36,421
Columbus, Ohio, US


Luke Ryan Photography wrote:

bankruptcies arent caused by medical debt, they are USED to discharge medical debt.

You wanna nitpick semantics? And I use that term loosely here, cause what you just said is pretty stupid.

Feb 20 13 03:52 am  Link  Quote 
Photographer
Cherrystone
Posts: 36,421
Columbus, Ohio, US


vbabe wrote:
Both my parents went bankrupt at some point. My grandmother is one who considers it stealing, but bankruptcy does have ramifications. Major things like not being able to buy a house, rent (or put down a higher deposit) or get a loan on a car are major ones. Can they liquidate a car if it's owned by the bank and not you? They can't do much if you rent, but they can if you have any value in your house.

Don't forget you can easily be liquidated in bankruptcy too. My dad was able to get by it, because he didn't have much equity in his house when he bankrupted in 2008. Not sure about his car.

No.....you can save your house in bankruptcy, and the equity won't be touched, if one choses to do so. But you still have to make the house payment.

Feb 20 13 03:57 am  Link  Quote 
Photographer
R A V E N D R I V E
Posts: 15,867
New York, New York, US


Small Fruit Pits wrote:

No.....you can save your house in bankruptcy, and the equity won't be touched, if one choses to do so. But you still have to make the house payment.

Gotta admit, I'm not very familiar with the various nuances of Federal Chapter 7 bankruptcy, vs Chapter 11 vs Chapter 13 vs the commonalities and differences of state bankruptcy statutes

Feb 20 13 04:56 am  Link  Quote 
Photographer
Looknsee Photography
Posts: 21,175
Portland, Oregon, US


R A V E N D R I V E wrote:
Hello, why is Bankruptcy considered bad? This is just a question that I must ask because of how the state protects the debtor

From what I know: filing for bankruptcy means that people you owe money to (that haven't already filed a claim) CANNOT collect from you. Filing for bankruptcy shields one from creditors.

People that are already after you for money, get whatever is left after all your assets are liquidated. House, car, etc. basically the stuff in your name, emphasis on your name.

The outcomes are:
1. You basically have nothing on paper
2. You have limited access to capital because banks won't lend to you (with the bankruptcy being on your credit report for 10? years)

but with just $200 you can get a nice secured line of credit and build your credit score right back on up!

so maybe give me objective reasons why bankruptcy is bad, or WORSE than having people and corporations garnish your paycheck.

(and no this thread isn't about me or anyone)

1)  Filing bankruptcy doesn't necessarily mean that you don't have to pay back the people you owe -- it most often means that you restructure the debt, sell off assets, pay the debt back over a longer time, etc.

2)  A bankruptcy can stay on your credit record for several years, making it nearly impossible to get new loans, and the new loans you do get will be more costly (e.g. at a higher interest rate).

3)  A bankruptcy on your record can have a negative impact on your chances when applying for a new job.

4)  A bankruptcy could impact your ability to get people to sign contracts with you.

5)  It's bad karma for you -- you failed to meet the obligations you willingly undertook.

Feb 20 13 07:50 am  Link  Quote 
Model
angel emily
Posts: 1,020
Boston, Massachusetts, US


netmodel wrote:
It's all about being dependability and reliablity. Since you filed bankruptcy, they view you as unreliable and not the person they could depend on for making money.

This.

I was always taught bankruptcy is something that "clears the slate" but never really goes away.  It's an ugly pimple you just can't hide.

Feb 20 13 07:53 am  Link  Quote 
Photographer
Robert Lynch
Posts: 2,483
Bowie, Maryland, US


Small Fruit Pits wrote:
No.....you can save your house in bankruptcy, and the equity won't be touched, if one choses to do so. But you still have to make the house payment.

Bankruptcy is an odd duck.  It's federal, but there are also state components to it.  Whether or not you can keep your home at all or what value in your home or car or other items you can keep if you liquidate them varies greatly from state to state.

Feb 20 13 11:42 am  Link  Quote 
Photographer
KonstantKarma
Posts: 2,513
Hickory, North Carolina, US


I filed a year ago.

Took me about 2 years to come to that decision and trying to avoid it.  Foreclosed as well.  Started over with no loans, no assets, just poor.

Felt guilty for a while - Although, should you add up all the interest and fees I paid my creditors, they still made a good profit off me over the years.

Like I've said on the gun threads, it's a tool that can be a life-saver, and a tool that can be abused.
Feb 20 13 11:53 am  Link  Quote 
Photographer
S W I N S K E Y
Posts: 24,315
Saint Petersburg, Florida, US


ArtisticPhotography wrote:
I wish I would walk away from 90% of my debt. But I can't. I'm responsible.

Its easy to sit back and say: "that wouldn't happen to me because i am responsible" but the fact is, it's not just irresponsibility that lands you in overwhelming debt.

http://i.imgur.com/m8TQi.png

Feb 20 13 12:20 pm  Link  Quote 
Photographer
SensualThemes
Posts: 3,042
Swoyersville, Pennsylvania, US


Virtual Studio wrote:

hmmmmmm. Then again the interest they get from you is in part an acknowledgement that they are taking on that risk,

you're ripping off precisely no one if it's an interest bearing commercial transaction.

So if Iborrow 12,000 from you personally at 5% interest for 30 years, a payment of just over 100/month. Less if interest only
.
I pay it for 3 years (let's say 3600).and file bankruptcy, you're not hurt by losing 8400 principal plus all the promised interest? There should be no consequence to me, no reason my stealing your money is bad?

If you say it isn't bad, you aren't looking at it as the lender

Feb 21 13 04:32 am  Link  Quote 
Photographer
Schlake
Posts: 2,343
Socorro, New Mexico, US


Pinups4 wrote:

So if Iborrow 12,000 from you personally at 5% interest for 30 years, a payment of just over 100/month. Less if interest only
.
I pay it for 3 years (let's say 3600).and file bankruptcy, you're not hurt by losing 8400 principal plus all the promised interest? There should be no consequence to me, no reason my stealing your money is bad?

If you say it isn't bad, you aren't looking at it as the lender

If, as in the scenario you are quoting, you are borrowing money from an object, then, no, that object isn't hurt.  Say you find gold in a rock.  You borrow the gold from the rock and sell it, intending to pay the rock back, but you never do.  The rock isn't hurt by this because the rock is just a rock.  It has no feelings.  You can't really steal from a rock, as a rock has no property rights, because it isn't a person.

Feb 21 13 05:49 am  Link  Quote 
Photographer
SensualThemes
Posts: 3,042
Swoyersville, Pennsylvania, US


Schlake wrote:

If, as in the scenario you are quoting, you are borrowing money from an object, then, no, that object isn't hurt.  Say you find gold in a rock.  You borrow the gold from the rock and sell it, intending to pay the rock back, but you never do.  The rock isn't hurt by this because the rock is just a rock.  It has no feelings.  You can't really steal from a rock, as a rock has no property rights, because it isn't a person.

Where do I find rocks loaning money?

Companies are made up of investors (people), shareholders (people) and employees (people) who are all hurt, or fired, if too many loans go bad (too much money is stolen) or if the company goes under cause of it

Feb 21 13 05:56 am  Link  Quote 
Photographer
SensualThemes
Posts: 3,042
Swoyersville, Pennsylvania, US


Schlake wrote:

If, as in the scenario you are quoting, you are borrowing money from an object, then, no, that object isn't hurt.  Say you find gold in a rock.  You borrow the gold from the rock and sell it, intending to pay the rock back, but you never do.  The rock isn't hurt by this because the rock is just a rock.  It has no feelings.  You can't really steal from a rock, as a rock has no property rights, because it isn't a person.

Noticed you stepped around the question posed...if YOU WERE THE LENDER would it still be fair

Feb 21 13 05:57 am  Link  Quote 
Photographer
Schlake
Posts: 2,343
Socorro, New Mexico, US


Pinups4 wrote:

Noticed you stepped around the question posed...if YOU WERE THE LENDER would it still be fair

The person wasn't responding to a statement about borrowing money from a usurer, they were responding to a statement about borrowing money from an object.

If you are borrowing money from a person, and that person is a usurer, then I think it is not wrong.  The usurer is morally corrupt and using a position of power to take advantage of someone in need.  It isn't wrong to fight back against a robber, it isn't wrong to fight back against a rapist, it isn't wrong to fight back against a kidnapper.  Why should it be wrong to fight back against a usurer?

Feb 21 13 06:11 am  Link  Quote 
Photographer
Stay Puft
Posts: 2,413
Ofu, Manu'a, American Samoa


Borrowing money from someone and not paying it back is bad. It is stealing and a violation of trust.

It's pretty simple.

The excuses for why you did it are irrelevant. The fact that the other party that you borrowed money from is rich or is making a profit or whatever are even more irrelevant from an ethical point of view.
Feb 21 13 06:45 am  Link  Quote 
Photographer
SensualThemes
Posts: 3,042
Swoyersville, Pennsylvania, US


Schlake wrote:

The person wasn't responding to a statement about borrowing money from a usurer, they were responding to a statement about borrowing money from an object.

If you are borrowing money from a person, and that person is a usurer, then I think it is not wrong.  The usurer is morally corrupt and using a position of power to take advantage of someone in need.  It isn't wrong to fight back against a robber, it isn't wrong to fight back against a rapist, it isn't wrong to fight back against a kidnapper.  Why should it be wrong to fight back against a usurer?

define userer

Usury is a legal definition. I don't see the OP suggesting or proving the creditors did something illegal. If so, another process not bankruptcy would have been offered by attorneys

So why are you positioning they did?

Feb 21 13 06:50 am  Link  Quote 
Model
Fergy
Posts: 22,362
Fenton, Michigan, US


Why does it seem like you're judging people that have filed bankruptcy?  Yes, there are people that abuse it.  Then there are others that simply can't do anything about it.

My husband lost his job, we lost our cars, house, everything.  We have nothing left of our "former" life.  We had no money for food, or clothing, thankfully we had a family member that helped us get a cheap used car.  I was working 2 jobs and could barely wait until payday to go get the limited groceries we could buy.  Peanut butter and jelly, macaroni and cheese or ramen were staples for our dinners.

Until you've walked in the shoes of someone who has lost everything, (and it has nothing to do with throwing money around) you have no idea how it feels to face bankruptcy and foreclosure.  It wasn't an easy decision by any means.
Feb 21 13 07:25 am  Link  Quote 
Photographer
SensualThemes
Posts: 3,042
Swoyersville, Pennsylvania, US


Fergy wrote:
Why does it seem like you're judging people that have filed bankruptcy?  Yes, there are people that abuse it.  Then there are others that simply can't do anything about it.

My husband lost his job, we lost our cars, house, everything.  We have nothing left of our "former" life.  We had no money for food, or clothing, thankfully we had a family member that helped us get a cheap used car.  I was working 2 jobs and could barely wait until payday to go get the limited groceries we could buy.  Peanut butter and jelly, macaroni and cheese or ramen were staples for our dinners.

Until you've walked in the shoes of someone who has lost everything, (and it has nothing to do with throwing money around) you have no idea how it feels to face bankruptcy and foreclosure.  It wasn't an easy decision by any means.

nope. No judgement here.  Been to the line myself

Judging those rho think charging any interest is usury and filing to escape paying back non-persons (companies) what you agreed to and owe and legally agreed to repay...yep. that part is called stealing

Feb 21 13 07:30 am  Link  Quote 
Photographer
ArtisticPhotography
Posts: 7,699
Buffalo, New York, US


S W I N S K E Y wrote:

Its easy to sit back and say: "that wouldn't happen to me because i am responsible" but the fact is, it's not just irresponsibility that lands you in overwhelming debt.

I realize that often bankruptcy occurs from medical debt. Granted, that's not a sign of an irresponsible person. The issue here isn't bankruptcy, the issue here is our health care system that allows this to occur, screws over the patient and also screws over the health care provider. In this case, everyone loses (except the lawyers).

People losing jobs is also a different case. That just happens sometimes. And again, it isn't about responsibility but about a system that also allows people to lose their homes when unemployed (assuming a reasonable home, reasonable expenses, etc.).

The irresponsible ones are the ones living off of debt, living beyond their means, borrowing more than they could ever possibly pay off, etc. When they go bankrupt, it is the equivalent of theft. But I sometimes don't feel too sorry for SOME of the lenders because they did bad loans to start with.

Feb 21 13 07:38 am  Link  Quote 
Model
V for Victory Modeling
Posts: 436
Roseville, California, US


I have a friend who was hit by a car and faced 60k worth of debt because she did not have health insurance. (poor college student). She had no choice to file bankruptcy, she was in school with no job and no way to pay 60k worth of medical bills.

For others and I know this from experience, I've worked with providers who aren't even willing to agree to a settlement. I think the provider has an obligation to make a patient sign a written agreement which includes the cost for services (outlining what the insurance will pay, if any and the total cost of services) making sure the patient understands what he/she is liable for before any services are rendered.

I had a procedure done and was under the impression my insurance covered it. Provider expected me to pay $1300 right after services. My fault for not checking my insurance coverage. However...if payment is due day of service, the provider also has an obligation to inform you of the charges due before they provide you services.
Feb 21 13 09:22 am  Link  Quote 
Photographer
David Kirk
Posts: 4,443
Ottawa, Ontario, Canada


Pinups4 wrote:

nope. No judgement here.  Been to the line myself

Judging those rho think charging any interest is usury and filing to escape paying back non-persons (companies) what you agreed to and owe and legally agreed to repay...yep. that part is called stealing

If it was stealing, they would be charged with theft, not granted bankruptcy.

There is a difference and there are good reasons for having bankruptcy protection.  If you really feel that you (as a member of society) are getting less benefit from it than detriment then you should lobby your government to change the laws.  Maybe in the process you'll discover why it exists in the first place and change your mind.

Feb 21 13 10:33 am  Link  Quote 
Photographer
Robert Lynch
Posts: 2,483
Bowie, Maryland, US


Alec Dealty wrote:
Borrowing money from someone and not paying it back is bad. It is stealing and a violation of trust.

Only if you borrowed the money with no intent to pay it back.

Alec Dealty wrote:
The excuses for why you did it are irrelevant. The fact that the other party that you borrowed money from is rich or is making a profit or whatever are even more irrelevant from an ethical point of view.

Losing your job in a bad economy isn't an "excuse".  Becoming chronically ill and having your health insurance cancelled isn't an "excuse".  Having to care for sick family isn't an "excuse".

Bankruptcy exists to allow people who have gotten into untenable financial situations to wipe the slate clean and start fresh instead of being saddled forever with debts that can't reasonably be paid, but I suspect you'd rather bankruptcy be eliminated and the debtor prisons be reopened.

Feb 21 13 10:38 am  Link  Quote 
Photographer
Robert Lynch
Posts: 2,483
Bowie, Maryland, US


Pinups4 wrote:
So if Iborrow 12,000 from you personally at 5% interest for 30 years, a payment of just over 100/month. Less if interest only
.
I pay it for 3 years (let's say 3600).and file bankruptcy, you're not hurt by losing 8400 principal plus all the promised interest? There should be no consequence to me, no reason my stealing your money is bad?

If you say it isn't bad, you aren't looking at it as the lender

Interest rates on loans are determined in part based on the perceived credit risk associated with the borrower.  A lender that expects every borrower to ultimately be able to repay their loans is an unrealistic fool, and builds the losses into the interest rates they charge. It's just a cost of doing business.

Feb 21 13 10:42 am  Link  Quote 
Photographer
In Balance Photography
Posts: 3,370
Boston, Massachusetts, US


If personal bankruptcy protections were eliminated, what would do instead?
Feb 21 13 10:48 am  Link  Quote 
Photographer
Schlake
Posts: 2,343
Socorro, New Mexico, US


Pinups4 wrote:
define userer

Lending money and charging the borrower interest.

Feb 21 13 10:52 am  Link  Quote 
Photographer
Compass Rose Studios
Posts: 15,979
Portland, Oregon, US


In Balance Photography wrote:
If personal bankruptcy protections were eliminated, what would do instead?

I think the fiscally conservative/accountability crowd would be giddy to further swell our prisons with those irresponsible debtors.

or maybe something humane like indentured servitude till the debts paid off.  At whatever double digit interest rate the lender thinks is reasonable of course...

Feb 21 13 10:53 am  Link  Quote 
Photographer
In Balance Photography
Posts: 3,370
Boston, Massachusetts, US


Compass Rose Studios wrote:
I think the fiscally conservative/accountability crowd would be giddy to further swell our prisons with those irresponsible debtors.

or maybe something humane like indentured servitude till the debts paid off.  At whatever double digit interest rate the lender thinks is reasonable of course...

How are we going to pay for those prisons? How about we fine the lender the exact amount owed for lending irresponsibly ?

Feb 21 13 10:54 am  Link  Quote 
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