Comments on: Utah, Mormons and Bankruptcy

By: Jonathan Green

Jonathan Green — Sat, 18 Dec 2004 13:04:35 +0000

Holy time shift, Batman!

I can’t supply any numbers, but I can mention kids as one additional factor. The authors of “The Two Income Trap” identify having children as the single best predictor of a family filing for bankruptcy.

By: Melinda Sue Wallace

Melinda Sue Wallace — Sat, 18 Dec 2004 12:52:09 +0000

There are several issues in Utah. One is that a higher percentage of Utahn’s try to repay debt using a Chapter 13 bankrupcy. When they fail to repay as scheduled, they are forced into a second bankruptcy – this time a chapter 7. Many of the families then have two bankruptcies and this certainly counts statistically. I actually think that the Mormon doctrine established in the article of faith “We believe in being honest”, makes many members of the church decide to try repayment schedules. A recent article in the Salt Lake Tribune discusses how Utah bankruptcy lawyers function differently than many in the country and this leads many families to file two bankruptcies, instead of just one. Mormon lawyers in particular will advise families to try to honestly discharge their debts through filing of Chapter 13, no Chapter 7.

The second reason I think that Utah has such a high rate of bankruptcy is because many parents are also students. These young parents are trying to work, raise small children and earn college degrees. I know one couple that ended up in bankruptcy after the husband’s home building business failed to sell homes rapidly enough. Both husband and wife eventually earned Master’s Degrees in Business Administration and are now very well to do. Certainly, couple like this could afford to pay slightly higher taxes to give tax relief to struggling young families.

Lastly, many couple struggle with the cost of daycare. I know one single mother who pays $800.00 per month for two children. Although she is a Registered Nurse and earns a decent wage, the extremely high cost of daycare stresses her finances. Her ex-husband is a recovering alcoholic who never pays child support. Utah women tend to have more children at a younger age. If anything happens to their husband (divorce, death, mental illness, disability or unemployment) they really struggle. Even women with college degrees struggle to afford daycare and medical care for children.

The bottom line is that Utah has got to start providing some tax relief for young families. We need to abolish the sales tax on items like milk and baby formula, Sure, we could continue to tax soda pop and potato chips, but honestly, it is a crime to tax baby formula.

I would raise the inheritance tax and lower the taxes on young, working parents. These parents will eventually get through college and earn great incomes. They’ll pay off large homes and ultimately leave large estates. Let’s tax people at the end of their lives (estate tax) instead of the beginning of their lives (newly married families, families raising young children).

By: David H

David H — Mon, 30 Nov -0001 00:00:00 +0000

The Utah Bankruptcy issues is all about our unique cultural demographics. We make less $ than any state in the union, we have larger homes(more rooms)than any state in the union, we have more children than any state, we have more cars than any state, we pay tithing and we send our sons on missions. If you combine these unique dempgraphics with the fact that members are not following the counsel of President Hinckley and living way beyond their means by running up high charge card debt it’s like mixing gas and paint thinner.The explosion is huge. Many active members of the Church believe that if they pay a full tithe the Lord will bless tham financially and bail them out of their debt problems. This is a false belief. We must follow the counsel of the prophet and stay out of debt if we expect to be blessed. If we make poor credit decisions and live beyond our means the Lord is not obligated to bless us.

By: Nate Oman

Nate Oman — Mon, 30 Nov -0001 00:00:00 +0000

David H: Perhaps you are correct, but to be honest with you, I would like to see some concrete data first. I have a strong suspicion that the age demographic alone would account for much of the divergence, which doesn’t require that you posit any difference between Utah and national consumption habits.

FWIW, most of the data that I have seen suggests that credit card and other consumer debt is not responsible for most personal bankruptcies. Rather, such bankruptcies are percipitated by finacial shocks like job losses or large, uninsured medical expenses.

By: Times & Seasons » The bankruptcy bill

Times & Seasons » The bankruptcy bill — Mon, 30 Nov -0001 00:00:00 +0000

[...] of the new burdens on attorneys. One interesting wrinkle from an LDS perspective is that Utah leads the nation in bankruptcies. And it seems that religious arguments can be made either wa [...]