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One of Elton John’s most popular songs is “Sorry Seems to Be the Hardest Word” and for many people, uttering those two little words “I’m sorry” is quite difficult. But when it comes to bankruptcy, do you owe anyone an apology? After all, it’s your legal right to file for bankruptcy, so why say it? A recent study found that offering a mea culpa – even a small one – to the judge in your bankruptcy case can mean the difference between having your Chapter 13 repayment plan approved or denied.
Two law professors from University of Illinois’ College of Law conducted research that found that apologies resulted in better outcomes in bankruptcy court. Their research jumped off from prior studies showing that apologists emerged better off when “wrongdoers” apologized to “victims” in both civil and criminal cases. The professors wondered whether a contrite attitude would make a difference in bankruptcy cases where there is no perceived specific victim in the proceedings.
Jennifer K Robbennolt and Robert M Lawless, the study authors, found overwhelmingly that judges who perceived the bankruptcy filer as remorseful were more likely to approve repayment plans in Chapter 13 bankruptcies. Part of their study discussed how bankruptcy differs in context from other legal proceedings in two important ways:
(1) Lack of a Specific “Victim” – Because the creditors are lumped in together in a Chapter 13 repayment plan, there is not a single face that represents a “victim” in the proceeding.
(2) Proceeding Initiated by Debtor – Unlike in other cases where the person who has been harmed files the case (in case of civil damages) or the state files a case on behalf of the victim (in case of criminal charges), it is the harm doer (for lack of a better word) that files the case which is an admission of responsibility in itself.
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Lawless and Robbennolt concede that nowhere in the Bankruptcy Code is a judge directed to consider a debtor’s remorse (or lack of) as a factor in their decision, but judges have a wide berth to make decisions based on their feelings. In both Chapter 7 and Chapter 13 bankruptcy cases, judges have wide discretion on what can be considered an abusive filing that leads to a dismissal. And when it comes to Chapter 13 repayment plans, judges are directed to consider whether debtors are making “good faith” filings. Apologies can be a factor that sways against dismissal and into accepting your repayment plan.
To test whether apologies factored into Chapter 13 bankruptcy decisions, the authors devised a scenario of a married couple with two children earning a modest income but with certain expenses that could be disallowed. The proposed repayment plan would keep them in their $180,000 home, but allow them to pay just 18% of their credit card debt over five years while keeping their children in after school activities and allowing for orthodontics for one child. Judges were randomly sent this scenario with the question of whether they would accept the repayment plan. The only difference was that half were given the scenario that included this apology from the debtors:
“We have no way of keeping up with our bills and repaying everything. It is all we can do to pay the mortgage and keep food on the table. We know that we are responsible for the mess we are in. We are truly sorry.”
The study found that the judges that received the scenarios containing the apology were more likely to approve the debt repayment plan. The difference wasn’t drastically higher, but enough to establish that saying “sorry” certainly carries some weight. The area where they saw a big difference was in perception of the debtor. Judges who got the mea culpa scenario were found to esteem the debtor much more than those without the apology. Because the good faith requirement for a repayment plan asks the judge to consider whether the debtor is likely to complete the payments, perception can be critical.
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Recently, I made a left turn where I shouldn’t have (a new sign prohibiting this escaped my notice) and faced a visit to traffic court. My husband advised me to make a sweeping apology, admit to the error of my ways and my subsequent rehabilitation to mitigate a stiff fine and points that would drive up our auto insurance. After I watched person after person get full points and fines, I decided to issue my own mea culpa. I did (even a little tearfully as I thought about paying more to insure my mini-van) and found my fine reduced somewhat and my points erased altogether. I am now a firm advocate of what my kindergarten teacher always told me – just say you’re sorry – and mean it.
This study indicates that while sorry sometimes seems to be the hardest word, it’s worth including in your Chapter 13 bankruptcy pleadings to enhance your perception with the judge who will ultimately decide whether to accept your repayment plan. If you are in debt and considering a Chapter 13 debt consolidation, contact us to discuss your options and get your finances back on track.
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