Utah bankruptcy isn’t about Mormons?
I caught this article while reading my science news this morning: Bankruptcy Rates Reflect Policy, Not People. Basically what the article says is that the different rates of bankruptcy filings by state are not due to spending patterns or characteristics of the people in those states but rather policies regarding bankruptcy filing – learn more here. In other words, Mormons aren’t REALLY spending more than they are making or filing bankruptcy at higher rates (by Mormons I mean Utahans, just to be clear). What’s happening is the laws in the state simply make it more beneficial to file for bankruptcy. Additionally, the younger age structure of the state increases the odds of Utahans filing for bankruptcy.
Okay, those arguments make sense. However, look at the affiliations of the professors who wrote it… Brigham Young University. Hmmm… Anyone think this is a direct response to the claims the paper debunks about Mormons spending too much and being quick to file for bankruptcy (as outlined above)? I’m not going to challenge the article’s findings (not my area of expertise and I don’t have the time), but if there are any economists out there who want to dig into this paper and try to replicate the findings, I’d be really interested to hear what you find.
My experience in my bankruptcy practice is that people will put off bankruptcy for a long time. Typically longer than they really should. I’ve seen people deplete their 401Ks, mortgage out their homes, take out second jobs, hold yard sales, and just generally suffer far, far longer than they ever should have over outrageous interest rates they had no real prospects of ever getting ahead of.
Sometimes they just wake up and give me a call. But other times the things that often force them into my office are:
1. Wage Garnishments
So yeah, the study sounds pretty accurate. Utah (being a die-hard Republican state) has generally crap collection and garnishment laws. It also matters how little or how much the state is willing to allow a debtor to sue a collection agency for abusive behavior.
I’ve known collection agencies to call every 30 minutes at 2:00 AM in the morning, swear at my clients, threaten them (untruthfully) with jail time, call up all their friends and family, and even smear their name to their neighbors. All of this is illegal under the federal Fair Debt Collection Practices Act. But this law only applies to collection agencies, not the original creditor. What the individual states allow you to do is another matter.
If Utah isn’t protecting debtors from abuses, then circumventing the whole process with a bankruptcy will not only be the most effective, but sometimes the only recourse.
A final word here:
My bankruptcy clients are not deadbeats. They are not generally morally inferior people. Out of dozens and dozens of bankruptcy clients, I’ll get maybe one who is actually a real sleazeball with accountability problems and a lack of a moral center. About 60% of my clients are age 55 and older. These are not irresponsible people. They are not evil. They are not subhuman.
This is why the new anti-Mormon fad about crowing about Utah bankruptcy rates pisses me off so much.
Not because they’re dissing the LDS Church. But because of the contempt such comments show for my clients – a contempt born of mean-spiritedness and ignorance of why bankruptcies really happen or about your neighbors who are forced into it.
It also reflects the typical self-righteous arrogance of those who happen to have gotten lucky in the economic lottery and are now patting themselves on the back for it, while sneering at those less fortunate.
This kind of bigotry is really widespread in the United States. Everyone feels entitled to judge those less fortunate. The bankruptcy criticism of Mormonism needs to stop. Not for the LDS Church, but for my clients.
I didn’t know you ran a bankruptcy practice, Seth. I think you’re comment is insightful and clear. Makes sense to me. Oh, and how great is MSP: Ask for an expert and one appears!
Agreed, Seth. I’ve recently had a go round with people who seemed self-righteous because they could afford health insurance and proclaimed “No more free hand-outs!”
Ignoring all the logical obstacles to pinning Utah’s bankruptcy rate on Mormonism, even if it were true, I think it would say no more than that LDS members are human, just like everyone else.
If someone wanted to go after anything “Mormon” about the whole thing, I’d suggest attacking the supposedly “Mormon” state legislature for not looking out for the vulnerable citizens under its care.
If you want to live a family values life style, you better support progressives who will allow you to assert your interests against big corporations.
It is probably not an accident that the LDS Church expanded the most rapidly in the wake of the New Deal.
The GI Bill and union jobs were great for Catholic and Mormon families.
By the way, Seth, I have been pointing to bankruptcy statistics but not because I blame people for a lack of virtue. Utah’s weakness shows two things:
1. The tithing myth does not work.
2. The brethren do not have the best interest of the members at heart.
The corporate orientation of official Mormonism maximizes the independence of the LDS Church and its leaders at the expense of the members.
Bankruptcy laws suck. The same is probably true of consumer protection. And we do not need to talk about civil rights in Utah.
Everything for the corporation. Very little for families and individuals. That’s how the Church likes it.
Members who rely on the brethren to watch out for them will find that they are on their own.
Rather than relying on the Brethren, we would be better off if we watch out for ourselves. That’s just how live works.
It’s doubly true when your leaders believe that they speak for God. Adam Smith was right when he said: “Virtue is more to be feared than vice for its excesses are not regulated by the conscience.”
Personally, I have found it difficult to protect myself from exploitation in the Mormon context because your superiors are invoking the will of God when half the time they are confusing their self-interest for the gospel.
If we told people that they are on their own and have to do what is best for them, most of us would have married latter, deferred having children, and would be more self-reliant as a result.
I am not a lawyer or in the bankruptcy field.
I do realize that many people are forced into bankruptcy through health care bills.
I can’t speak for those who tout the high bankruptcy rates in Utah. I do have a handful of thoughts.
1 – I have known of people who will pay their tithing on credit cards. Despite the fact they are cautioned not to. Not that using credit cards will lead to bankruptcy – but I believe there could be better education about priorities. I believe this education is not in the LDS church’s interest, as if someone stops paying tithing, it does impact their bottom line. Which is why it doesn’t happen.
2 – I have also known people who start up small businesses (some out of Utah) unrelated to mormonism where the small business goes out of business, declares bankruptcy, and the person/employee does not get paid for their work. I can think of two instances of this with my parents, one where I was the person who did not get paid. Now, this may be unrelated to mormonism as well – and members have been specifically cautioned against getting involved in business schemes.
BUT – as chanson has eloquently observed before, in some circles, starting the next multi-million dollar business is seen as more “successful” than having a phd, being a medical doctor, laywer, etc. Again, there could be increased education about business ventures, etc. I’m not opposed to entrepreneurs. But I wonder if this is a factor.
3 – It seemed to go unnoticed in my Helen Andelin post, but Utah also has a high percentage of plastic/cosmetic surgeons for the population. Now, correlation does not equal causation – I get that.
But I do think it would be worthwhile for any organization to really assist people in examining where they spent their money, what they’re priorities are and WHY they spend the money they do. (ex. Will they get to heaven if they don’t pay their tithing? Will they get to heaven if both spouses work? )
I suspect that some (cultural) changes could be made (including health care reform) that could drastically cut some of the bankruptcies.
Just some of my observations.