There’s a lot of buzz going on in the media about a recent article (html) published by two law professors at the University of Illinois College of Law that seems to indicate that bankruptcy judges are more likely to give favorable treatment to those who are apologetic about filing for bankruptcy.
I’ve seen recent blog posts peppering cyberspace discussing this article, including one by the Wall Street Journal, and I also heard this as the lead story on local KNX Newsradio’s financial segment a few days ago.
The misleading teasers given by the media about this article help perpetuate a stigma about filing bankruptcy that really should not exist. As I will point out below, the professors’ article doesn’t even conclude that apologies affect the outcome of bankruptcy cases, or even that people should be sorry.
Do Not Feel Guilty About Filing Bankruptcy
I have written before on why people should not feel guilty about filing bankruptcy. Being sorry is not the same thing as feeling guilty, although in present day society the two do seem to go hand in hand.
Filing bankruptcy is breaking a promise to repay debts, so it is appropriate to show some level of contrition for that. However, bankruptcy laws are designed to benefit society as a whole, so in my opinion, one should never need to apologize for taking advantage of laws that benefit them.
Apologizing Will Not Likely Affect the Outcome of Your Bankruptcy Case
Perhaps more pointedly, the professors’ article mentioned above does not reach the conclusion all the media’s attention getting headlines imply. Instead, it states that among the Judges it surveyed, there was a statistically insignificant in responses between those who were given a fact pattern where the debtors filing the bankruptcy were apologetic, and those who were not. ¹ It did, however, indicate that the Judges perceived that those more apologetic had a better chance of succeeding in a repayment plan and not repeating the same patterns of behavior (if any existed) that led to the bankruptcy filing.
But I’ve been doing this over 20 years and I’ve never seen an instance where a bankruptcy asked whether a debtor was sorry. This isn’t criminal court where a judge is trying to determine the level of culpability the defendant has when figuring out how long a sentence to give. Moreover, in the vast majority of bankruptcy cases, there isn’t even an opportunity to let a Judge know the party filing the bankruptcy is sorry.
It’s OK To Be Sorry, But Not Required
Thus, while I can see certain bankruptcy case situations where it might be beneficial to let the Judge know how you feel, it should not affect the outcome of your case if you don’t. How you feel is your business, as is how you proceed with your life after bankruptcy. And, just for the record, I would say that over 90% of my clients feel both guilty about having to file bankruptcy and sorry that they are unable to repay their debts, and most have tried for years to repay debts they clearly could not pay because they feel responsible.
¹ In the study, the professors said they told participating judges about the Millers, a fictional family of four with a $180,000 home, $25,500 in credit card debt and a $26,000 Ford Explorer SUV. Their credit card debt ranged from $9,000 for the husband’s medical expenses to $270 per month spent on their two daughters, ages 10 and 13, for gymnastics. At the end of their Chapter 13 payment plan, which paid unsecured creditors 18% of their debt over three years, the Millers wrote, “We have no way of keeping up with our bills and repaying everything. It is all we can do to pay the mortgage and keep food on the table. We know that we are responsible for the mess we are in. We are truly sorry.” Half of the judges received the Millers’ Chapter 13 payment plan without the apology. And when the results came in as to whether a judge signed off on the plan, they found that more judges were willing to approve a plan that included the apology.