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Bankruptcy Attorneys

Aren’t there ethical, religious or other reasons I shouldn’t file for Bankruptcy?

A great number of our clients feel there are moral or even religious concerns that make them hesitant to seriously consider a bankruptcy. At Rosen & Rosen, we respect each individual’s right to believe and feel how they may on any personal matter. We also respect a person’s sense of duty to live up to the obligations they have made. However, on this page we would like to provide some interesting points of view and facts that we have learned over the years, while raising some important questions. Ultimately, the power to choose whether or not to file for bankruptcy is yours and we will not try to persuade your ultimate decision either way.

Morality

Morality is defined as a person’s concern for principles of right and wrong and the behaviors they undertake that are consistent with those concerns. While it is important to live up to one’s obligations, consider the following: What if a credit card company, bank or other company or individual extends far more credit to you than they reasonably or prudently should? What if they did it just so they could turn around and sell your debt to someone else for a profit? What if a company charges you exorbitant interest rates and late fees when you cannot repay that which a reasonably prudent company would not have lent you in the first place? And then, what if that company further declines to try to work something out with you that is fair? What if that company then sells your debt to another company who then calls and writes threatening letters? How moral is any of that behavior?

To protect your mental and physical well-being and the well-being of your family, is it morally wrong to seek another remedy under the above scenarios? When is it no longer morally acceptable to allow your obligations to others to jeopardize your commitments to yourself, your health and your loved ones? What then is the moral and right thing to do? Protect yourself, your health and your family? Or protect a company or companies who might have made poor business decisions or who may not have acted in good faith in other ways? I always remind clients, if you feel so compelled to pay, you can always repay your discharged debts after the bankruptcy has concluded. You almost certainly will be in a better financial position to do so.

Interestingly enough, the United States Bankruptcy code builds in some important “moral” considerations. First of all, it requires persons who file for bankruptcy to have “clean hands” or that they act in good faith. Accordingly, a debtor may not be freed from debts involving fraud, driving under the influence, and deliberate wrongdoing. Also, bankruptcy does not allow the discharge of child support, alimony, secured loans, most student loans and most taxes. Through these and other mechanisms, bankruptcy laws seek to balance justice and morality, while providing our society with a very important and legitimate process for debt forgiveness.

Your Right To File For Bankruptcy Is In The United States Constitution

Under Article 1, Section 8, Clause 4, of the United States Constitution congress was given the authority to establish “uniform laws on the subject of bankruptcies throughout the United States.” The United States Constitution is the foundation and source of all legal authority of United States of America. It created our system of representative and democratic government. It laid the framework of a unique three branch system of government with checks and balances built in to each of the branch’s powers. It also established the role of federal government as it relates to our states, citizens, and all people within the United States. Our founding fathers understood the need for an established system for individuals and corporations to be able to discharge debts in bankruptcy; they addressed this legitimate and important function in our country’s most important and powerful document.

Religion

The entire concept of bankruptcy, which is forgiveness, is a recurrent theme throughout the Bible. However, the Bible does specifically addresses financial forgiveness. Under Biblical law, the release of debts came at the end of seven years. “At the end of every seven years you shall grant a release of debts. And this is the form of the release: Every creditor who has lent anything to his neighbor shall release it; he shall not require it of his neighbor or his brother, because it is called the Lord’s release” (Deuteronomy 15:1-2). Interestingly enough, U.S. law extends this biblical provision by one year by allowing a debtor to receive a discharge of debts in subsequent chapter 7 bankruptcies only once every eight years.

The Bible also asks us to ask God to “forgive us our debts as we forgive our debtors” (Matthew 6:12, Luke 11:4) and teaches the importance of debt forgiveness in passages such as, “And when they had nothing with which to repay, he freely forgave them both” (Luke 7:42).

But I Feel Like I’m A Failure If I File For Bankruptcy?

Bankruptcy does not mean you are a failure! Just take a look at some examples of extremely successful people who filed for bankruptcy at some point in their lives.

Walt Disney declared bankruptcy before eventually creating Disney World in Orlando.
PT Barnum filed and four years later got in to the circus business…
Kim Bassinger, after her bankruptcy, went on to win an Oscar for her role in the movie L.A. Confidential.
Lorraine Bracco was bankrupt before she played the role of psychologist on the incredibly successful HBO show, “The Soprano’s.”
Toni Braxton filed and later went on to sign a $25 million dollar singing contract.
Francis Ford Coppola recovered from bankruptcy to become the director of the Godfather trilogy, winner of five Academy Awards and owner of a successful winery.
Henry John Heinz filed for bankruptcy as his company that made horseradish, pickles, sauerkraut and vinegar went out of business. He then immediately started a new company introducing a new condiment, tomato ketchup.
Larry King filed for bankruptcy in 1960 and then again in 1978.
Donald Trump filed for his casino empire in 1992 and 2004.
Henry Ford filed for bankruptcy after his first of three automobile companies failed. A second one was also a failure. Then, at the age of 40, he created a third company, the Ford Motor Company.

If you or anyone you know is considering filing for bankruptcy, call or contact our bankruptcy attorneys today. Let the lawyers at Rosen & Rosen serve you.

We are a debt relief agency. In addition to other legal services, we help clients file for bankruptcy relief under the Bankruptcy Code.