Delinquencies on the Rise
Last week the American Bankers Association announced that loan delinquencies (loans with payments past 30 days overdue) have reached a record high in the United States for the first quarter of the year. This stat begs the question - how important is it to pay back our debts? What if we lose our employment? What if we can’t feed our family?
Elder Joseph B. Wirthlin commented on this very subject: “Let me tell you the story of one man who sacrificed greatly to maintain his own financial integrity and honor.
In the 1930s Fred Snowberger opened the doors of a new pharmacy in northeastern Oregon. It had been his dream to own his own business, but the economic turnaround he had hoped for never materialized. Eight months later, Fred closed the doors of his pharmacy for the last time.
Even though his business had failed, Fred was determined to repay the loan he had secured. Some wondered why he insisted on repaying the debt. Why didn’t he simply declare bankruptcy and have the debt legally forgiven?
But Fred did not listen. He had said he would repay the loan, and he was determined to honor his word. His family made many of their own clothes, grew much of their food in their garden, and used everything they had until it was thoroughly worn out or used up. Rain or shine, Fred walked to and from his work each day. And every month, Fred paid what he could on the loan.
Years passed and finally the wonderful day arrived when Fred made the last payment. He delivered it in person. The man who had loaned him the money wept and with tears streaming down his face, said, “You not only paid back every penny, but you taught me what a man of character and honesty is.”
What are your thoughts on Loan Delinquencies? How important is it to you to repay your loans - no matter your financial situation?
July 14th, 2009 at 6:07 pm
Caleb, paying back our debts is a vital part of integrity. Many of the prophets have spoken on this, including this from Marvin J. Ashton:
“Please listen carefully to this—and if it makes some of you feel uncomfortable, it is on purpose: Latter-day Saints who ignore or avoid their creditors are entitled to feel the inner frustrations that such conduct merits, and they are not living as Latter-day Saints should! Bankruptcy should be avoided, except only under the most unique and irreversible circumstances, and then utilized only after prayerful thought and thorough legal and financial consultation.”
However, his last sentence is also key. Because of that, I’m slightly uncomfortable with your closing phrase “no matter your financial situation.” As Elder Ashton suggests, there are “unique and irreversible circumstances” that would warrant bankruptcy.
I think this is important for two reasons: First, church members should understand that bankruptcy is an option and that it doesn’t necessarily reflect a lack of integrity or any degree of unrighteousness, and secondly, knowing this can prevent us from unfairly judging those who have experienced bankruptcy.
Thanks for the post!
July 15th, 2009 at 7:40 am
@Stephen
Thanks for your great comment! That’s an excellent quote from Elder Ashton - and I agree whole heartedly with your thoughts on bankruptcy. I’ve heard some say bankruptcy is NEVER an option (I don’t agree), which is why I posed the question with that closing caveat.
In my years with a credit union, I worked with countless individuals and families who had done all they could to pay their debts with integrity and honor - but finally found bankruptcy to be their only option. These wonderful Latter-Day Saints continue to live a life of honor and integrity, and garner just as much respect as those who are able to steer through life without resulting to bankruptcy.