What 'Really' Causes Bankruptcy

More

Another bankruptcy attorney weighs in in the comments section:


A lot of what your friend says about bankruptcy clients having taken on risks they couldn't handle is true. However, I DO feel sorry for most of my clients who have taken on too much risk, because almost always, they did it without realizing that was what they were doing. Nobody wants to be taking lessons in financial management from bankruptcy filers, but the fact that someone made poor financial decisions doesn't really speak to whether one should "feel sorry" for them. For the record, I have yet to see a single client who has filed for bankruptcy because of "live for the moment vacations or big interior decorating projects put on the credit card, drug addiction, [or] gambling." Most people aren't doing things that common sense says are financially insane. They are doing things that are financially insane in ways that are not immediately obvious to the average person, like overinvesting in real estate or risky stocks, or failing to have a big enough emergency fund because they assume that their credit cards will be enough to carry them through a gap in employment. Most of my clients could stand to sit down for an hour or so with a financial advisor, but most of them are NOT wildly irresponsible idiots.

I'll be doing some fiscal checkup posts tomorrow as people start looking ahead to the new year.    We should all look hard at our savings and ask how long they'd really carry us through in a pinch.


Jump to comments

Megan McArdle is a former writer and editor at The Atlantic.

Get Today's Top Stories in Your Inbox (preview)


Elsewhere on the web

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

Miami: The Next Big Start-Up City?

How the city became a center for innovation

Video

Video

A Brief History of Romantic Comedies

From The Atlantic's Chris Orr

Video

Video

Life in 'the New Arctic'

A moving portrait of a fading landscape

Video

Video

The Rise of New York City

A fascinating look at Manhattan in the 1940s

Video

'I Thought It Was Really Funny, but No One Else Did'

A day with New Yorker cartoonist Joe Dator

Video

New Yorkers: The Winemaker

Make your own wine ... in New York City

Video

What Is Methane Hydrate?

"Flaming ice" is a vast natural energy source

Video

NASA's Time-Lapse of the Sun

Now with epic dubstep music

Video

A Video Letter From the Editor

Highlights from the May 2013 issue

Video

Shaken Not Tuned: Cocktail Experiments

Can a tuning fork improve a cocktail?

Video

Video

The Rise of Environmentalism

Tracking 50 years, from the Love Canal disaster to Greenpeace

Video

Is He Cheating? A 1950s Guide

'That little blonde secretary from the office?’

Video

New Yorkers: Vintage Vacuum-Tube Amps

Risking electric shock to restore old amplifiers

Video

The DIY Piano-Bicycle

Everybody needs a hobby

Writers

Up
Down

More in Business

In Focus

2013 National Geographic Traveler Photo Contest

Just In