Talking about our financial difficulties is taboo in this society. We lionize those who make a fortune; everyone expects to live the middle class life. Most of those meeting with a bankruptcy lawyer for the first time manifest some kind of shame, the sense that their financial hole is the sign of a moral as well as financial failure.

As long as no one will talk about it, each person imagines that they are the only one with this sort of problem. ( see a profile of the typical bankruptcy filer). They imagine that they will have to justify their situation to the bankruptcy system in order to get a discharge.

The cult of silence may be why the debt settlement/debt management businesses do so well. For a price, you can hire someone to get you out of the hole without declaring bankruptcy, and therefore failure. Only those models seldom work for one of two reasons: writing one check for the same amount as you wrote a bunch of smaller checks is still the same amount of money. It’s not the number of checks that is the problem, it’s the amount of money necessary to retire that debt, even over time.

The debt settlement model fails because creditors don’t stop trying to collect when contacted by one of these for profit outfits. The first money paid by the consumer goes to the company, not the creditors. So the consumer gets hassled by creditors or sued by one of more before the debt settlement folks have paid anyone but themselves.

Individually and societally we would be better off with more openness about personal finance. As I wrote earlier,we should practice candor about money with our kids. Collectively, have an honest dialogue about the role of credit in our economy and about the massive transfer of money from the middle class to the financial industry in the form of credit card interest, fees and penalties. Look at the extent to which borrowing on credit cards has replaced a societal safety net.