Columbia Missourian Newspaper 1966-08-28

              Counseling Service e for Potential Bankrupt Needed L In ID II 11 high Fr From m Page Pa 7 7 it gives you en an idea IMa of what hilt these families Cami go through But it stops stopa there It doesn't really tell why the tha Does sad and their bankruptcy in comrades in bankruptcy end cad up where they the do or what hat starts stam them o off f. f Nor does it tell how they could have avoided 8 the situation The Does Doe certainly certainly didn't brow bow the answers SOME MEN NIN however increasingly concerned over the rate of bankrupt bankruptcies des cies ia is this thle state st te have hue some ame ideas One man manager of the Columbia office of s I finance company says that people like the Does Dees are almost wholly to blame blam for or their own Um problems problem If It If these th ae people would only be honest honet with us us instead of living in their little dream worlds they'd let us know the thereal thereal real state stat of their finances when they come to borrow Then wed we'd know for certain whether or not they should take tab takeout takeout out a loan lo n from us Instead they lead us on and force us U into a corner comer Then we have to take action It has been discovered as we hove have h ve seen with the Does that bound bankrupt-bound families lam li s do often act unwisely They tend to be over optimistic to depend on wishful thinking and rely on OD future windfalls which usually dont don't come around They're careless with their bookkeeping and they tend to have a strong appetite for goods they cant can't possibly afford SOME DONT DON'T think the source of the problem is limited to these persons alone They may get in trouble if left to their own resources sources r Dr Edward Metz n head of the Home Manage Manage- Management Management Management ment and Family Economics depart depart- department ment meat at the University of Missouri MisSuri and president of ot the Missouri Association of Consumers says but we grease the skids for lor these people in many ways Through advertising for exam examS pie Ads tend to project the idea that everybody's getting color TVs TV's new cars and so forth Youve heard of o keeping up with the Joneses' Joneses Jone s' s Well WE'll advertising is often the great Mr Jones himself and peo peo- people people with unrealistic appetites s hav have a great urge to keep up with him him even even ven if they're not in his league This is especially harmful to some of our country's poor who see a color TV as the very least they can expect out of life lire and for or some immigrants who are led to believe that affluence is an automatic part of o stepping on or U. U S. S soil To attain what they see as the minimum standard of living they buy unwisely on credit go into debt and start the evil circle Arch Troelstrup a national leader in the field of consumer economics and director of family economics at Ste Ste. Stephens College agrees that advertising is a stimulant for tor appetites which might ultimately send a person into bank And theres there's another problem related to advertising he says when the ads dont don't quote the full price of a product when bought OR on ORthe ORthe the credit plans they recommend Theres There's BO no law on the books right now to require that they do so so either The Douglas Leading ia in fe ding g bill which h is show eight years ears old hasn't yet been adopted by Missouri Consumer pro pro- protection protection protection groups are anxious to see it be bf become become come law and we do have the sym sym- sympathy sympathy pathy Pithy of the attorney generals general's office But he be claims dolma he be has bat priority higher measures pending right DOW now S a TOTALS condemning credit buying g though The Wall WallStreet WallStreet Street Journal sayi eay that the nations nation's economy relies oa on it Its what makes the wheels go round Credit buying used wisely holds few fit laagers dangers But Troelstrup and sad agree that the ambiguities of the credit system can trip up uninformed consumers can trip up even you Iou Sears SenJ Roebuck Co the largest department d store chain in the country with dozens dorms do of a retail mail outlets in Mis Mis- Missouri Missouri mi is a II major m r center of credit buy buy- buying tag ing in n the state Robert Leonard credit manager for lor Sears in Columbia says his firms firm's on credit buying are standardized in the state We dont don't make much of an effort to find out whether or not people can pay for what they're buying They usually can canIve canIve canIve Ive I've found lound that most people are oriented in regard to the responsibilities ties tie of credit buying In fact most peo peo- people people people here in Columbia pay cash for fot their purchases II What about those people Ie who dont don't Does Sears sometimes push people over the brink of bankruptcy I dont don't think so We try not to play the heavy when were we're faced aced with a family fam y who doesn't or doesn't-or or cant can't pay cant pay its installments The problem has to be resolved one way or another though and we try to tobe tobe I Ibe be human about it il We take each in in- individual individual case cass into consideration Usual Usual- Usually ly Iy we can work something out which satisfies both parties 0 0 ES though as with our oW friends the Does Dots the situation is too complex for lor a 81 simple solution An aver aver- average average average age bankrupt individual owls ow s money to 12 creditors creditors and and the amount often adds up to thousands of dollars Not only do bankrupts often owe de de- department department de- de department and Other stores but also a aloan aloan aloan loan company and sometimes more than Ulan one of those Theres a serious problem of o communication com com- communication communication between finance companies and our customers says the Columbia finance company manager and by and large its it's the customers' customers fault Heres Here's an example When a family who has taken out a loan with X company and has exhausted the money it knows that it cant can't get more from X so it often tries mea another firm Y Ideally Y should be in contact with X and should check to see if the family has already been committed there or at any other finance company com ny in town We do this But Put many companies dont don't even bother sad and d this thim just juet complicates the family's financial tangle But even we cant can't keep the situation in hand when a family famEy fam y gets it into iato its mind to borrow from soother another company while they're still committed to us They can go eo out of town The people there would have to make malke hundreds of phone hone caps calls to establish that family's credit rating You can see bow how we run into trouble A communications lem And a problem of honesty too Little of this would happen if people were honest with us u. u if they laid it on Oil the line right away After ail ai their wh lings and dealings always catch catchup up with them in the end and we have these tragic bankruptcy situations e WHERE IK DO YOU start start preventing personal bankruptcy when its it's such a complicated subtly motivated condi condl- condition condition tion Troelstrup suggests four measures which he be thinks would be effective in preventing much of the personal dis distress dis- dis distress tress and economic dangers of per per- personal personal personal bankruptcy It should be made more difficult for people to declare bankruptcy he said A lot of people rite file for bank bank- bankruptcy bankruptcy bankruptcy when in fact they could pay payoff payoff off their debts with a serious austerity program Bankruptcy should be denied these people Wage seizures garnishment should be minimized Not only does this practice panic people and drive them over the brink but it rarely takes the whole of their individual family eco eco- economic economic economic situation into account Down payments on costly purchases such as homes and cars should be in in- creased The Federal Housing Admin Admin- Administration Administration has evidence that low Jow down doW payments attract people who may not be able to pay the full amount of the purchase Higher down payments might require people to save before they buy and this would give them ex ex- experience experience experience in managing their funds and learning financial discipline More sponsored community-sponsored debt- debt counseling services should be established established liaised on a Ii free or nominal fee basis They should be manned by competent personnel trained in family economics We have such a facility in Columbia but too many people consider the Family Service Center only an aid for poverty cases It isn't limited to that BANKS BAl AND FINANCE firms have set up many of their own counseling services in recent years and claim they are arc the best qualified to counsel their debtors But Troelstrup doesn't think so Bankers and 2nd lawyers arent aren't trained to truly understand the needs of these people They do what they can do but it isn't enough Education is another oft mentioned suggestion Since ignorance of family economics is a prime cause c luse of events leading up to bankruptcy many economists economists economists mists have urged compulsory L In ID II 11 high lion tion in family finance perhaps schools where at least leAn the radd of Gf wise planning may ma be taught But what about people who b haven't bavent 0 had opportunity to gain gaiD from any of S- S these suggestions What happens after alter bankruptcy What happened to the theDoes theDoes theDoes Does Well WeD some bankrupts post go right back to their old ways finding firms firma to tend lend them money moDe again so that they may recover the goods they've test lOst They've tasted blood and cant can't resist the urge to Uve high once osce again They're not allowed to file fife for bank ban rupt y for six Ix years yean after the most re- re recent recent cent filing so ao some finance companies consider them a good risk Sooner or some later I ter some of them are back on the theold theold theold old downward road Troelstrup however believes that there isn't enough evidence to say con con- conclusively conclusively conclusively that bankrupts become ad- ad diets dicta to debt Many he says learn leara their lesson the first fint time o s THE DOES were one of those farm lies ties Life was difficult for tor a few years ye ra after they left that courthouse in Kan Ean- Kansas sas City John and Betty found it hard to adapt to life without some same of the luxuries And their three kids grew up in sparse surroundings for a while John hadn't lost his job though He Hl hasn't received that raise yet but after the embarrassment of the Ute gar garnishment threat wore off hes he's gotten on well with his boss Hes He's begun to tosa save sa ve At Al first he and Betty paid only cash for their necessary purchases Then a afew afew afew few weeks later they thought they could afford a new stove if they bought it on credit The thought of that almost scuttled the plan But they conferred with their bank and spoke at length with the credit manager at the store Everyone agreed they could afford the stove installments even if unexpected expenses came up So the Does now have a new stove in their home And they're still saving Their level of aspiration hasn't changed much They'd still like a color TV But now both John and Betty admit they're go going going ing in to have to be realistic from now on There wont won't be a color TV for quite some time But they're prepared for forem emergencies em r now and even are plan planning ning for their kids kids' college educations x s a aITS aIT'S ITS IT'S A SLOWER life now but the theDoes theDoes Does Docs agree alree its it's a better one In place of watching TV Bettys Betty's been doing a alot alot alot lot of reading She's poring over David Daid Copperfield now and the theother theother other ot her night found something in it she decided to quote to John at dinner that night Only slightly paraphrasing Mr Micawber she said Annual income 20 annual expenditure 1995 result happiness Annual income inome 20 26 annual expenditure result misery John winced as she spoke But then their little daughter still in her high highchair highchair chair piped up that mean Mommy John Jhn and Betty laughed