Sometimes You Just Have To Shake Your Head
I came across something that just doesn’t seem to make sense to me today.
A client is a secured creditor of a debtor in a Chapter 7 bankruptcy (liquidation rather than reorganization). In looking at the court documents, it appears the guy’s wife had some sort of injury/illness that has resulted in about $5,000 in medical bills. They owe a bit more than triple that on two vehicles. Their assets exceed their liabilities by about $11,000. Their net income (after taxes) is about $40,000 a year. They are about $5 a month “positive” in cash flow (income over expenses).
They are spending $130 a month on charitable contributions, $100 on personal grooming, $175 for home and cell phones and $78 for satellite TV.
The law firm that is handling the bankruptcy for them is one of the TV advertisers in the area (“Bankruptcy is still an option"). As part of the process, they had to take an internet bankruptcy “credit counseling” course.
Now, I know nothing about bankruptcy (other than “automatic stay” which screws my clients); but, somewhere in this mess shouldn’t someone raise their hand and say “hey, cut the money to charity, the fancy phone service and satellite and you’ve got another three or four hundred a month to pay your debts faster, what the hell are you doing filing for bankruptcy?”
6 comments:
Makes sense to me, Dave. Of course, if something about economics, finance or law makes sense to me, look out.
Unless things have changes, I thought having a Bankruptcy filling on your record was a bad, bad thing -- akin to some serious social/financial stigma.
What has caused that to change in our culture?
My daughter the pharmacy tech says people come in and refuse or say they can't pay a two dollar copay for their meds, but have cell phones, plenty of bling and think nothing of putting five bucks in vending machines while they are waiting for the pills minus the two dollar copay. As in your bankrupcy scenerio I guess some folks have their prorities all screwed up
It's all about "wants" and "needs". You don't "need" fancy phones, satellite, or giving to charity. You may "want" these things, but you don't "need" them to survive. You "need" food and shelter, etc etc.
Priorities man...some folks just don't have any.
I was thinking the same thing and then I got to your final paragraph. People just are clueless these days.
I'll say!
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