A Fighting Chance

At the Democratic National Convention in September 2012, I said the game was rigged, and a lot of people in the audience seemed to agree.





Pickup trucks rumbled through West Roxbury on the night before the election.





Down to the wire, I was still out stumping, this time with lots of help.





When we made history, Bruce gave me one of the biggest and best hugs of my life.





Notes

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1 | Doing What Needs to Be Done

a chance to start over without a pile of debts pulling them down: US bankruptcy law offers debtors a chance to get some relief from overwhelming debts, both by restructuring some debts (reworking a car loan, for example) and discharging a debt (writing off credit card debt, for example). Nearly all personal bankruptcies are filed either in Chapter 7 (liquidation) or Chapter 13 (restructuring). When a person files for bankruptcy, a trustee is appointed to oversee the process; the trustee’s duties range from examining the debtors to make sure they have listed all their assets to selling certain assets and distributing funds to creditors. A family may retain certain forms of property through bankruptcy (“exempt property”), such as home equity and the tools necessary for that debtor to make a living, depending on the applicable state and federal law. In Chapter 7 bankruptcy, the debtor turns over her nonexempt property to the trustee, who then liquidates the property and disburses the proceeds to unsecured creditors. In return, certain debts can be discharged. (Some debts, such as student loans and child support, cannot be discharged in bankruptcy.) In Chapter 13 bankruptcy, the debtor keeps all her property, exempt and nonexempt, but surrenders a portion of her future income to repay creditors over a three-to-five-year period, with the trustee overseeing the repayment plan. When the debtor has successfully completed the repayment plan, a portion of the remaining debt will be discharged. Filing for bankruptcy also stops debt collectors and provides temporary protection from foreclosures.

great defeat and, often, personal shame: Despite claims that bankruptcy has “lost its stigma,” the evidence suggests that there is still a lot of personal shame surrounding bankruptcy. For example, one long-term study found that 50 percent of bankrupt families were unwilling to admit, even anonymously, that they had filed for bankruptcy. Scott Fay, Erik Hurst, and Michelle J. White, “The Household Bankruptcy Decision,” American Economic Review 92 (June 2002): 706–18. Other studies have shown that a large portion of households that do not file for bankruptcy would significantly benefit from filing for bankruptcy, which suggests that stigma prevents at least some people from acting in their best financial interests. See Michelle J. White, “Why It Pays to File for Bankruptcy: A Critical Look at the Incentives Under U.S. Personal Bankruptcy Law and a Proposal for Change,” University of Chicago Law Review 65 (Summer 1998): 685–732. People on the ground, such as those who advise clients with respect to bankruptcy, further reaffirm the sense of anguish and personal shame people feel when filing for bankruptcy. See Elizabeth Warren and Amelia Warren Tyagi, The Two-Income Trap (2003), 74 & n.12; see also Daniel Bortz, “Surviving the Emotional Toll of Bankruptcy,” US News and World Report, January 18, 2013 (illustrating the perspective of financial therapists, who see bankruptcy as taking a huge toll on a person’s self-esteem and emotional well-being). In the course of researching for The Two-Income Trap, our research team found that more than 80 percent of families said they would be “embarrassed” or “very embarrassed” if their families, friends, or neighbors knew of their bankruptcy. See The Two-Income Trap, 74 & n.13.