You know the old saying about walking a mile in someone else’s shoes? I think we should pass a law that requires the folks with money to trade places with a person who’s filed for bankruptcy. Just for a week or so, to get the flavor of how it feels.
In the story American Airlines, Bankruptcy, and the Housing Bubble, James Surowiecki of The New Yorker looks at the 2011 American Airlines bankruptcy filing against the backdrop of the issue of consumer debt. Surowiecki likely thinks he’s being sympathetic to the plight of people with bill problems, but his words sound paternalistic and pretentious, the writings of someone who’s probably never had to face bill collectors who call during dinner to mock you and make you feel like a lowlife.
Surowiecki claims that “a good percentage of Americans are in much the same position as American Airlines: they can still pay their debts, but doing so is like setting a pile of money on fire every month.” I don’t know which planet he lives on, but it sure ain’t this one.
A good percentage of my clients are living hand-to-mouth each month, making constant decisions about whether to pay for groceries or shoes for their kids. They call me when they’re behind on the rent or mortgage – not just a few weeks or months, but really far behind.
They’ve been through credit counseling, debt settlement, and the figment that is mortgage modification. Every possible entity and person has taken money out of their pockets, providing nothing but empty promises in return. They’ve been kicked in the groin so often they walk hunched over.
They can still pay their debts? Sure they can – in Bizarro World.
Saying my clients are somehow awash in money and simply find repayment to be modestly inconvenient is the same crap the Republican Congress handed out in the lead up to the 2005 overhaul in the bankruptcy laws. Consumers could pay their bills, the argument went, they were just too dishonest and scheming to do so.
And guess what? That change in the law is credited to some extent with the easing of lending guidelines and the current foreclosure crisis.
So please, don’t mistake AMR for my bankruptcy clients. AMR engaged in some legally-permissible financial planning in order to get out of some union contracts and contain costs. My clients, on the other hand, come to me so they can keep food on the table and get some peace of mind.
Image credit: stevendepolo