The Poverty Prejudice

 Posted on March 09, 2015 in Bankruptcy

What do attitudes about the nature of poverty tell us about bankruptcy filings?

In 1995, 60 percent of Americans said that poor people did not show enough initiative to lift themselves out of poverty, while only 30 percent acknowledged that circumstances beyond the person’s control caused wealth or poverty. 19 years later, these figures had shifted to 44 percent and 46 percent, respectively.

When asked to identify these external factors, some pointed to low-wage jobs that do not pay enough for people to get ahead, while others observed that wealth or poverty was essentially a matter of being born into a wealthy or poor family. Still others blamed the high number of government assistance programs that, they claim, encourage people to remain poor.

A pollster summed up the findings by saying that “Americans have complex contradictions in their attitudes.”

Why People File Bankruptcy

The idea that poor people are somehow defective is not at all unusual. Many people attribute the extreme poverty in some Latin American countries to the so-called mañana culture. “I’m sorry I’m late, but I’m on Latin time” is a lighthearted excuse for tardiness to a business meeting that has some very real cultural underpinnings.

Many people place bankruptcy debtors in this category. They believe that filers were financially irresponsible and engaged in overspending, particularly with regard to chapter 7 liquidations. Poor spending and saving habits do lead to bankruptcy in some cases. In other cases, the reasons are outside the person’s control, such as:

• Divorce or separation;
• Medical debt;
• Family emergency; and
• Job loss or business downturn.

In a large number of cases, several of these factors may come together to form something of a perfect storm. For example, a growing family whose income has increased every year may buy a house that is slightly larger than they can afford in anticipation of future needs, but the house becomes burdensome after a job loss or divorce triggers a temporary income loss.

If you have more debts than you can currently pay, chapter 13 bankruptcy allows you to put yourself on a payment plan to catch up. While you’re in bankruptcy, creditors cannot take any adverse action against you without special permission from the bankruptcy judge. That includes repossession, foreclosure, and even annoying collection calls.

To claim your fresh start, contact an experienced San Antonio bankruptcy lawyer. Call The Law Offices of Chance M. McGhee at 210-342-8400.