The fallen auto mogul gets headlines, but the real truth of bankruptcy is that ordinary people are blindsided by life.
"Take thy beak from out my heart, and take thy form from off my door!" Quoth the raven, "Nevermore." - Edgar Allan Poe
Is he gone yet?
Denny Hecker has been haunting those of us who practice consumer bankruptcy law.
I don't know how many clients have prefaced their initial consultation with me by proclaiming they are "not Denny Hecker.''
A recent search of the Star Tribune's archives turned up 222 headlines that contain the word "Hecker." The results are choice:
"Hecker's history of lies will keep him in jail, judge rules''
"Is Hecker hiding assets from bankruptcy court?''
"Suit: Hecker squirreling away money''
"Bankruptcy trustee accuses Denny Hecker of fraud''
However, bankruptcy fraud is the exception and not the rule.
In 2009 there were 1,473,675 bankruptcy filings in the United States. Of these, just 1,611 criminal referrals were made by the United States Trustee (a division of the Department of Justice that administers bankruptcy cases). And of those, just 24 resulted in formal criminal charges.
So fraud and bankruptcy don't go hand in hand. People file bankruptcy because they got divorced, or the roommate moved out, or a job was lost, or someone got sick or disabled, or someone who was needed for financial security died.
Bankruptcy exists because we deem it a societal good to give our fellow citizens a second chance.
No, Mr. Hecker is not the face of bankruptcy. Anyone could become the face of bankruptcy, depending on whether the winds of fortune blow ill or good.
Let me explain. Every two weeks at the U.S. Bankruptcy Courts in Minneapolis and in St. Paul, the Volunteer Lawyers Network and the bankruptcy court sponsor the Bankruptcy Advice Clinic. The clinic gives these folks 15 minutes each with a bankruptcy attorney to discuss their case.
I recently volunteered at that clinic. Over 2 1/2 hours I met 14 people -- perfect strangers who instantly revealed their deepest secrets, their hopes and fears, their victories and defeats, proclaiming the worries that keep them up in the deep of night. For some, the discussion is catharsis.
What would their headlines say? Here's a sample:
"Unemployed father of 6 soon to lose unemployment compensation; has already depleted 401(k), has no remaining assets and is desperate."
"About to be homeless single mother wonders if bankruptcy will stop eviction in process."
"Failed businessman who plowed life's savings into defunct venture seeks bankruptcy guidance."
"Man who was the picture of health one year ago now riddled with cancer, has reached the maximum benefits on his health insurance, and has medical bills that top $100,000."
"Disabled woman scared to death by $49,000 judgment against her for second mortgage on house she never should have been suckered into buying in the first place."
These are the typical stories of people who file for bankruptcy. But these headlines aren't lurid or glamorous. They aren't about wealth or fraud or crime. They are about bad things that happen to ordinary people who are blindsided by life.
And so, every time after I have heard my client's tale, and my eyes lock with theirs, I am haunted by the thought that there, but for the grace of God ....