• She sat at my desk, scared and frustrated. Then I strongly recommended she go bankrupt. The tears welled in her eyes and then she started crying. Culturally this was not acceptable; she did not want to be a failure. Was she? Of course not! That’s the problem with the word bankruptcy, it carries a bad stigma.

    My long mortgage career began working for financial institutions including a large major bank. My training included not giving away the lowest rate immediately and bankrupt people are the lowest of the low. I honestly believed that these people overspent, had no pride in their credit and took advantage of the system. My first encounter with a bankrupt person was a gentleman chemist who was trying to cure cancer. That did not sound to me like someone trying to take advantage of the system. Then a lady who was in a devastating car accident, then a business that got crushed during the recession, then a family who was spending money trying to save their son from a rare disease. These were not bad people. They just had bad luck. Most of these circumstances were beyond their control or economic circumstances had changed.

    In Canada over 1 million people have declared bankruptcy in the last decade and have faced the stigma.
    There are two kinds of stigmas:

    See themselves as failures
    Have a moral conscience
    Highly responsible and hopefully time will heal it

    Credit scores dive
    New credit will be hard

    In business, this is where the competent take over the incompetent.

    I am meeting that lady this Thursday. Since our emotional meeting, she has gained her confidence again. She made a good decision going bankrupt. She got a second chance, learned valuable lessons and is doing well. What did l learn; most bankrupt people are good people who had bad circumstances

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