Why are so many people over 55 going bankrupt?

[Serious Conversation]

Originally Posted by TheShadow

Sorry friend, I don't rip other people off by running up bills and then failing to pay my debts. I have morals. I improved my financial standing by holding down a good job, even if that meant sucking it up to do things others didn't want to, getting raises, saving my money, making smart investments, honoring my word, and standing against the consumerist-keep-up-with-the-Joneses mentality.

There are valid reasons to declare bankruptcy, a failed business, crushing medical debt, etc. but if believing in paying my own bills is excessive pride, well then I guess I'm proud, and proud of it too. I listen to Dave Ramsey A LOT, he's a man with principles, and he rarely advocates for bankruptcy except in such cases as those above. He is all about helping people find the way to PAY THEIR DEBTS by knuckling down and, as he puts it, "eating beans and rice, and rice and beans" until your debt is paid off, not paying 3 cents on a dollar to defraud others. If that's what you got from his broadcasts and books, you weren't listening or comprehending very well.

But Dave's BK was not the typical BK. He was essentially an overleveraged real estate speculator that had his notes called upon closer inspection. That is a far, far cry from a typical person's CH7 or CH13.

I've been in serious financial trouble twice in my life. Back in 2012, I was making $45k/year in Iowa. I didn't want to stay there. I came back home in 2013, taking a temp job with the intent to move in three to six months to a Raleigh, Charlotte, or Nashville type of city for a better job. That didn't happen. I ended up in three temp jobs within twelve months - the first company ended my temp job with no explanation and no warning, the other was 50 miles away, and I quit that job 50 miles away when I found something local. I was never made permanent at the local job. I was able to keep things paid up, but I had to move in with my parents and I didn't do anything that year.

The second time was in 2016 when I was probably going to lose my job without anything concrete lined up. I had way too many bills, but you have to remember the cards started to get racked up from 2013 when I was down to $10.68/hr for 36 hrs./week with no medical insurance. I had pneumonia that winter, and an urgent care visit and prescription wiped out a month's net pay. "Beans and rice" isn't going to help much at $10.68/hr - you need to "bore with a bigger auger."

Did I make stupid decisions? Absolutely, but if it comes between my future and AMEX getting paid in full, I'm choosing my future.

[Sibay]

Originally Posted by OldNSlow

So, I take it you don't know that he *did* pay off those debts?

Yes...in his own sweet time, without having to deal with constant calls from creditors, threatening letters, accumulating interest on the past debt, late fees, etc.etc.etc. During that time he was able to establish new credit and the bk was slowly working it's way off his credit report. By filing for bk he avoided all the things others go thru when they make what they believe is the moral decision to not file.

I don't advocate a free for all when it comes to filing for bankruptcy btw, but I do think it's ridiculous for people to wave the moral flag, claim they'd get 3 jobs, live in their car and eat dirt with a side of bugs for as long as it took to pay off the debt before they'd ever consider filing for bk, especially for seniors.

[Serious Conversation]

Originally Posted by Sibay

Yes...in his own sweet time, without having to deal with constant calls from creditors, threatening letters, accumulating interest on the past debt, late fees, etc.etc.etc. During that time he was able to establish new credit and the bk was slowly working it's way off his credit report. By filing for bk he avoided all the things others go thru when they make what they believe is the moral decision to not file.

I don't advocate a free for all when it comes to filing for bankruptcy btw, but I do think it's ridiculous for people to wave the moral flag, claim they'd get 3 jobs, live in their car and eat dirt with a side of bugs for as long as it took to pay off the debt before they'd ever consider filing for bk, especially for seniors.

I really don't get the "moral decision" component for a huge company.

I wouldn't want to screw a small, local business or anyone I know personally. Big corporations like AMEX have a certain amount of default built in to their business model. I wouldn't consider myself to ever be "screwing AMEX" unless it was just rampant fraud.

[TheShadow]

I stated what I would do rather than file BK. I didn't say that I expect others to have the same value set that I have. I see everyday that others don't, and I find it sad. I don't need to explain my morals, but if it helps you to understand my point, I will. Not paying your debts, to me, is stealing. Is it less wrong to steal from a big company like Walmart than to steal from Frank's Market? Of course not. You can soothe your conscience by saying that they're a big company, they get to write off their losses, etc. but it's still wrong to steal.

It is an abomination that our society has made things like medical care costs so extreme that an operation might cost more than someone makes in their lifetime. It's insane! That's why I made the exception in my statement for things like crushing medical debt, or even business failures, because a business can fail through no fault of the owner due to a failing economy, etc. There is a spectrum of moral relativism, and some people are closer to the absolutist end of the scale and some are closer to the relativist end of the scale. You do you.