A quarter page advertisement in the New York Times shows a young man and woman laughing, (a boyfriend-girlfriend sort of moment), under the headline “GET THE WHOLE STORY ON HIM, BEFORE IT IS TOO LATE.” The advertiser, Intelius, promises to check out two things about this potentially dangerous guy: 1) Bankruptcy, and 2) Domestic Violence Convictions.
At the same time, Katie Porter over at CreditSlips unearthed credit card giant Capital One’s 10-K warning investors that future business might not be so rosy if “social factors” such as “the stigma of personal bankruptcy” decline.
So there it is: A huge credit card company says it may see spiraling losses if more people decide to abandon all moral conviction, and a background search company reminds America that guys who file bankruptcy and beat women are on par with each other — shoot, maybe they are the same guys.
Corporate America has a message: bankruptcy is about moral depravity. It isn’t about medical debt and job loss, not about ex-spouses who die or who run off. And it certainly isn’t about anything the lenders might have done — like high fee mortgages with introductory teaser rates or credit cards with interest rates that quadruple when a customer is late paying another creditor. Ignore the evidence to the contrary — we know a moral truth when we see one.
If you are in financial trouble, says Capitol One, you will pay unless you are morally depraved. And if you meet someone who has filed for bankruptcy, says Intelius, watch out!
Juxtapose those stories with the one Debb Thorne posted this morning also on Credit Slips. Dr. Thorne is Project Director for the Consumer Bankruptcy Project, which is in the field collecting data on families filing for bankruptcy. She tells yet another heart-breaking story about a widow who has done her best in coping with the economic fallout of getting old and sick. Despite the reasons for filing, the woman faithfully follows the same moral line as Bank One and Intelius, describing how deeply ashamed she feels about the decision to file for bankruptcy. Despite the reasons for filing, the woman faithfully follows the same line as Bank One and Intelius, describing how deeply ashamed she feels about the decision to file for bankruptcy.
Terry Sullivan, Jay Westbrook and I wrote a piece using filing data to analyze the hypothesis that the stigma of bankruptcy has declined over time. (The stigma hypothesis is inconsistent with the data.) But data don’t matter in this arena. Once someone has the chance to lay blame elsewhere, the discussion is no longer about reality.
