Bankruptcy is a common subject that many consumers try to stray away from. People do not like to talk about it, and no one wants to declare it. People think bankruptcy is taboo. This looming taboo has persisted for far too long, no doubt with the help of major credit companies and banks. These credit companies and banks likely spend millions to turn bankruptcy into a social taboo, and to sway public opinion against declaring bankruptcy. The reason they do this is simple: if the consumer declares bankruptcy, then lending institutions cannot recover the money they lent out.
Creditors Encourage Consumers to Take Out Huge Amounts of Debt
At first glance, it seems fair that people who borrow money should be expected to return it. But upon closer examination of the lending economy in America, all is not what it appears. The truth is, credit lenders make huge amounts of financial profit off the consumer that borrows from them. They encourage consumers to take out huge amounts of debt because they know that consumers are more likely to live a life of indebtedness rather than declare bankruptcy. In conjunction with the taboo they have created around bankruptcy, they actively spend millions to persuade the consumer to fall into debt. Credit companies and banks constantly bombard your mailboxes with endless offers of credit. You are asked to sign up for a credit card every time you visit the bank, the mall, or any store. Payday cash advances seemingly have a store on every block so that you can conveniently take out a loan from them. Then they all charge astronomical interest rates on the money you borrow, and increase your credit limit without your authorization. This type of predatory lending behavior is exactly what caused the financial collapse in 2008.
Bankruptcy Exists for a Reason
Bankruptcy exists for a reason. It was created by Congress to allow the consumer to get out of debt if they fall prey to the practices of these lending institutions. It was designed to allow the debtor a fresh financial start, so they would not have to live a life of indebtedness. In addition, it can be used as a tool to save your home from foreclosure, and to stop the harassment of collection agencies.
The Rich and Famous File Bankruptcy
In fact, many famous celebrities have declared bankruptcy in the past, including Mark Twain, Michael Jackson, Kim Basinger, and Mike Tyson. They may not have had the savvy financial skills to save the millions they’ve earned, but they were certainly surrounded by knowledgeable financial advisors who advised them to declare bankruptcy.
Bankruptcy is not Uncommon
Today, it is not uncommon to find oneself in debt due to the predatory actions of lending institutions. Remember, they are not offering to let you borrow money because they want you to buy that new dress or the latest gadget. They stand to make millions off you if they keep you indebted. Just as they have no moral conscious to warn you about borrowing, you should have no moral qualms with declaring bankruptcy. Bankruptcy is a tool to help your financial situation; use it to your advantage! Bankruptcy is not taboo.