Should You Pay Your Debts?

A friend recently lent me the DVDs of the series of interviews called Errol Morris’ First Person. For those who don’t know, these are one-on-one interviews with assorted interesting (but not hyper-famous) people, filmed in a highly stylized way. Errol Morris did “The Fog of War,” which I really liked, so I was interested in seeing more.

I do recommend watching a few, though I think I overdosed by watching too many in a row. One in particular has me thinking.

The interview is with Andrew Capoccia, an attorney who specializes in helping people get out of credit card debt. First, he finds all the places where the creditors broke the law and sues them for damages. He points out that credit card companies break consumer laws almost as a matter of course when trying to collect.

Another tactic is simply to negotiate. He says: look, the amount in question is $50,000. My client can afford to pay $5,000. Take it or sue us. Often, they’ll take it.

These both seem reasonable to me, but I get a little uncomfortable in the psychology of the thing. Capoccia says that a big obstacle to getting out of debt is the guilt that people feel over not paying what they owe. Sometimes the agent on the phone will actively try to make the debtor feel guilty, saying, “you bought these things. Don’t you think you should pay for them?”

Capoccia says that people shouldn’t feel guilty at all. He says to think about it as a business: when a business can’t pay a debt, no one feels guilty. They just all sit down and work it out. People shouldn’t feel guilty either. You’re in the business of getting out of debt.

But I think I disagree with his premise. I think that businesses, or the humans who make business decisions, should feel guilty about not being able to pay off a debt. They’ve broken promises, and there’s an actual cost to it. It’s not victimless.

Whenever a loan isn’t paid back, someone has to pay. Big, faceless credit card and insurance companies have little employees with lots of faces. Maybe enough defaulted loans mean layoffs, or less vacation time, or inferior health insurance. Maybe it means that they give less to charity. But even without all that, doesn’t it matter that it’s just not your money? You’re spending someone else’s money.

I wonder what Capoccia would say if the lender was the mother, or friend, of his client? Is it still just the business of getting out of debt? “Sorry, Mom, but you can take a quarter of what you lent me, or you can sue me.” Is that right? And if not, then why is it right when the lender is a corporation?

3 Responses to Should You Pay Your Debts?

  1. Jeffrey May 26, 2006 at 10:16 pm #

    Prime example of the lack of integrity I see from time to time.

    My daughters sometimes ask why we need to behave in a good way. I often try to find practical reasons (e.g., because people wil like you better or because society falls apart if no one treats anyone well), but ultimately, a lot it is just “because that’s how you should behave as a decent person.”

  2. weeklyrob May 27, 2006 at 5:40 pm #

    Of course, it’s harder when one doesn’t feel comfortable saying, “God wants you to.”

    I wonder how much of what we teach children about morals actually becomes part of them, vs. it just sinking in (or not) as they grow in society with the genes we gave them.

    I mean, take language: most responsible parents in the Western world talk to their kids. But even if they didn’t, the kids would end up learning to speak, just by virtue of being in a society which speaks and carrying genes which respond to hearing language by learning it. They’d pick it up whether we forced it on them or not.

    I wonder if morality is similar, much as we’d like to think it’s not.

  3. gman June 8, 2006 at 11:20 am #

    It’s really about individual responsibility, being able to look at your self in the mirror and say “I’m OK and people like me”.

    Culture, society, law and religion all try to govern what is deemed right or wrong but as we now there is no universal right or wrong. What behavior is completely acceptable in one culture (big) or household (small) is unacceptable in others.

    There is a line of morality that is different for each of us. The laws (both written and assumed) that reward and punish are our attempt to make that line the same for everyone.

    The bread plate is always located to left of your place setting forgetting this should be no big deal but depending on where you forget it the ramifications can be considerable.

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