Last week I met an attorney I had been introduced to for lunch. I knew little about his Massachusetts personal injury practice and wanted to learn more. I hoped he wanted to learn about my diverse law practice. During lunch he noted that the real estate market is rather slow and my Massachusetts real estate law practice must be off. I acknowledged that was true for the real estate practice, but that in these difficult economic times my Massachusetts bankruptcy law and Massachusetts divorce law practices are busy.

Often, domestic discord rises as money pressures increase. This can be an even larger problem if one spouse has lost employment and the other feels they are unfairly carrying the entire burden of supporting the family. Finance issues are often at the heart of a divorce case. The personal injury attorney acknowledged how bad times can lead to an increase in the divorce rate, but then continued on to say that bad times shouldn’t necessarily lead to an increase in bankruptcy filings. I was absolutely flabbergasted and asked how he could say that. He explained that people should live frugally as he had growing up. He said his family was careful about money in the fear that someday there might not be any, and that staying in financial control meant there would never be a bankruptcy filing. He then commented that bankruptcy was for those people who were irresponsible in managing their debt by allowing credit cards to support extravagant life styles. I was incredulous.

I explained to my colleague that the bankruptcy clients I had helped came to me down many different paths, and that rarely was that path the irresponsibility of living extravagant lives off of credit cards. I was compelled to tell him about the elderly couple from Orange, MA who were forced into bankruptcy when the gentleman became terminally ill, there was no medical insurance and there were plenty of medical bills. Then, I thought of the hardworking mill worker and realtor who went through a divorce and now had their same respective incomes but two households to support. The debt became overwhelming and they filed Chapter 7 bankruptcy. I also told him of the couple who came to Framingham, MA from Brazil seeking the American Dream. Both husband and wife worked several jobs and they bought a home. They were proud of their accomplishment and that they were living the dream. They had trusted an unscrupulous lender to take care of placing their mortgage. The lender had given them two loans, both interest-only with low initial rates and payments. These loans would adjust in a year in rate and payment, but by then they were told there would be a refinance of the mortgages to a fixed rate loan. When the couple balked, the lender assured them “we do this every day, trust us, it works.” With the declining market there was no refinance of the mortgage, only an inability to pay increased mortgage payments, inevitable foreclosure and the need to seek debt relief by filing bankruptcy. Finally, I told him of the newly graduated college student. She had received very little aid for her school tuition and expenses, other than many student loans. Her parents took the view that they paid for their education and she needed to pay for hers. Despite a new, good paying job she found it difficult to pay the large student loan payment and pay her living expenses. She started to supplement her budget by paying for food and essentials with credit cards. Soon it was to late to turn back, and Chapter 7 bankruptcy was her only option.

After I had finished recounting these sad stories, my colleague acknowledged that bankruptcy was there to help good people who had bad things happen to them. I told him that I was glad he could see that. I asked him about his parents, who instilled his value for fiscal responsibility. He told me they lived in Massachusetts and were retired living on social security. I expressed my best wishes for them. I didn’t want to tell him about the heartache I foresee for our senior citizens and others on fixed incomes this winter when the fill-up of an oil tank is likely to cost $1,250 and the heating season at least $5,000.