"Just the word bankruptcy embarrasses me"

There are reasons bankruptcy triggers feelings of shame and embarrassment.

First of all, creditors want it to trigger those feelings. The more people feel ashamed and disgraced about being unable to pay their bills, the fewer will turn to bankruptcy to solve their problems.

So encouraging feelings of shame is very good for creditors' bottom lines. At least they're feeling good! 

The myth that debt equals poor character

Creditors have contributed to a very harmful social myth: that people who try to crawl out from unpayable debt are bad people. They are breaking their promise to pay. They are getting off "scot-free."

But here's the truth. No society can survive if people with impossible debt do not have a safety valve. Permanently poor people don't buy things. They can't afford to take chances, so they fall behind. They become a drag on the economy.

Our founding fathers knew this, and placed provisions for debt relief squarely in Article 1 of the Constitution. They didn't want a country in which people didn't participate in the affairs of the nation because they were buried in debt.

There are cases of bankruptcy fraud, and there are some cases of people who frivolously overspend and get into trouble. But the vast, vast majority of people filing for Chapter 7 have been struck down by something beyond their control - they lost a job, or they got sick, or their marriage came apart.

A gift to the future

Chapter 7 is a gift America's founding fathers gave to the future - a way out of debt when it becomes unpayable. So never feel embarrassed by bankruptcy. Be proud you live in a society that offers people who are struggling a way to build themselves up again.

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