bankruptcy

[joan_klinkert]

is it necessary to make restitution after bankruptcy if you can later borrow the money?

 

[vern_humphrey]

Bankruptcy is a “second chance.” There are, as you suggest, moral problems associated with it. On the one hand, people can fail financially through no fault of their own. On the other, there are people who deliberately use bankruptcy to defraud creditors. Bankruptcy also makes it very difficult to obtain credit later on.

I would say, yes – if you can pay, you should pay. However, it seems to me that if you can pay, albeit slowly, it would be best to first work out a revised payment schedule with your creditors, and not declare bankruptcy at all.

 

[quasimodo]

is it necessary to make restitution after bankruptcy if you can later borrow the money?

I thought there were legal prohibitions to making restitution. Could be very wrong though.

 

[1ke]

is it necessary to make restitution after bankruptcy if you can later borrow the money?

You should not *borrow *money in order to pay others that you owe. You would then merely be creating more debt.

Bankruptcy-- chapter 7-- discharges your legal obligation to repay the debts. The creditors are not expecting repayment after a bankruptcy and will have written off those debts.

Morally, if one can pay them back later then one could try to do so if one felt called to do so-- but not by borrowing from somewhere else.

 

[Princess18]

I thought there were legal prohibitions to making restitution. Could be very wrong though.

Once you file for bankruptcy, but prior to your court date and discharge, you will be limited as to how much you can pay back each of your creditors. Once you’ve gone to court and been discharged the debt is gone. It’s not there any more, so there isn’t anything to repay. If you try to send them a check after the debt is discharged, they should send it back to you.

I have a hard time with anyone who has not declared bankruptcy answering this question. It’s easy to judge if you have not been there. As someone who has gone through it, I can not begin to describe what a blessing it was to have this option. It was painful, humiliating, and with lasting consequences, to be sure. However, like your sin once confessed, your debt is “absolved” with bankruptcy. Feel like you need more penance? Resolve to give a larger portion of your income to the Church and charities. Focus on what got you in the bad spot and then fully commit to modifying the behaviors that got you there.

 

[lizaanne]

Feel like you need more penance? Resolve to give a larger portion of your income to the Church and charities. Focus on what got you in the bad spot and then fully commit to modifying the behaviors that got you there.

Excellent advice!

~Liza

 

[Bennie_P]

Quote:
Originally Posted by Princess18 forums.catholic-questions.org/images/buttons_cad/viewpost.gif
Feel like you need more penance? Resolve to give a larger portion of your income to the Church and charities. Focus on what got you in the bad spot and then fully commit to modifying the behaviors that got you there.

Excellent advice!

~Liza

I second that, tryin to repay a debt which it has been concluded and judge by the courts you are unable is just setting you up to fail again. When one files bankruptcy they have asked for mercy, and received it by the courts. You are forgiven by the courts and if you confess it before a preist, you have been resolved to go and sin no more. If one was able to make restitution they wouldn’t have had to file bankruptcy to begin with …

 

[Lamb_Serenade]

There is a second type of bankruptcy that can be filed. It is Chapter 13 which is called reorganization of your debts.

This is a good description:

What Is Chapter 13 Bankruptcy

When someone files for bankruptcy under Chapter 13 of the Bankruptcy Code, their aim is to have the opportunity to repay some or all the debts in their name, in better terms, i.e. lower or no interest. Unlike Chapter 7 which involves liquidation of assets, this process allows the debtor to use whatever income they may have in the future to pay off the creditors. Needless to say, filing Chapter 13 Bankruptcy is applicable for a debtor who does have a regular income, and thus can afford to request for such adjustments, or reductions.
The United States Bankruptcy Code gives the debtor a ceiling of 5 years, within which the creditors must be paid back. While the attorney will safeguard your interests, the entire process is carried out under the supervision of the courts.

So if you are interested in repaying your debts, but don’t have enough income to continue payments, etc as they stand, filing under Chapter 13 will give you a little more protection doing it.

 

[StCsDavid]

is it necessary to make restitution after bankruptcy if you can later borrow the money?

Bankruptcy (as a law) is not a moral issue, but rather a legal one. Lenders figured out a long time ago that at some point someone is just not going to be able to pay them. They factor that in when they set their interest rates and fees that everyone pays to cover their costs of doing business, part of which is when folks, for whatever reason, have a spate of bad luck and default on their loans. So while it appears that you have harmed the financial institution in reality, you’re just a variable in their business model using a legal means to settle your situation.

On the other hand, if you used bankruptcy as a tool to get out of paying what you rightfully owe simply because you don’t want to pay and you decide to take advantage of the law, then it becomes a moral issue and even a criminal issue in some cases. If you were charged with a crime you would have to pay some kind of restitution.

IMHO, in this case one’s moral obligation is to change the behavior that led one down the path to bankruptcy. Was it really bad luck or simply poor money management or a combination thereof? An honest assessment should be made.