•      Bankruptcy is not a moral issue.     All of my clients made rational decisions based on the best information they had at the time. The myth that most people filing for bankruptcy are abusing the system is exactly that - a myth.
  
  
•      Article I, Section 8 of our Constitution gave Congress the power to establish, "uniform Laws on the subject of Bankruptcies throughout the United States." In 1789, free-market capitalism was in its infancy. Commerce was not yet the heart of society. It was possible to mostly opt-out of capitalism.
  
  
•      Bankruptcy laws, if they existed at all, were for people who chose the free market. Since then, free-market commerce has permeated everyone's lives. There is no longer any option to avoid it. The turn to consumer credit began after World War II.
  
  
•      Bankruptcy is not a moral issue.  In 1958 the Bankamericard was launched. Everyday commerce began to done with credit instead of cash. In 1974 Bankamericard became Visa, and the credit era exploded. Like free-market commerce, we no longer have an option to avoid the effects of a credit-driven society.
  
  
•      This change has produced an evolution in our bankruptcy system. Bankruptcy is so critical to our credit-based economy, it is now a "no-fault" system. There are no moral issues to bankruptcy. However this change has come so quickly that we still have images combining debt with personal relationships. Only sixty years ago, the lines spoken by Jimmy Stewart, as a banker in "It's a Wonderful Life," rang true for most people:

"Well, your money's in Joe's house . . . that's right next to yours. And in the Kennedy House, and Mrs. Macklin's house, and, and a hundred others. Why, you're lending them the money to build, and then, they're going to pay it back to you as best they can." - - James Stewart as George Bailey in "It's a Wonderful Life" (1946)

•      Bankruptcy is not a moral issue.     This old world of personal relationships combined with business relationships is long gone. Your business relationships today are mostly based on impersonal contracts between you and another impersonal entity. There is no longer any moral obligation to abide by impersonal written contracts. There is no moral obligation to pay your mortgage, no matter what someone might say on television.
  
  
•      Your mortgage was probably arranged by a mortgage broker. This person sold it to a bank or some other financial institution you had no prior contact with. It was then combined with others, divided up in slices and sold to investors you did not know. The loan servicing was handled by another anonymous entity. A foreclosure by another. NONE of these entities believe they have any moral obligation to YOU.
  
  
•      Bankruptcy is not a moral issue.     Beyond mortgages, many of today's consumer contracts are immoral on their face. If you finance a car, the contract says that you have no right at all to change your mind. You hand over your old car, put down a little cash, and drive off in a new one. If you change your mind five-minutes later, it is too late. But this restriction only applies to you, the buyer!
  
  
•      Standard auto finance agreements allow the car dealer to change their mind weeks later. If the dealer cannot "sell" the loan they made to you, they can demand more money, or demand that you bring the car back! In the meantime they are allowed to sell your trade-in, so you might wind up with no car at all.
  
  
•      Bankruptcy is not a moral issue.     A contract that allows one side to change its mind, while the other side cannot, is not moral in any sense. It is just a "contract." Contracts these days to not carry ANY moral weight. You have an absolute right to reject contracts by way of bankruptcy. Bankruptcy is not a moral issue.
  
  
  

Bankruptcy is "No Fault."  Bankruptcy assumes you made rational decisions

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