When a large corporation files for Chapter 11 bankruptcy, it's business as usual without a cloud of taint hanging overhead. If anything, the corporation's CEO is heralded as a smart businessman with a plan to restructure the company's debt and set the business on a healthier course.
But personal bankruptcy says something else. It screams "loser" and throws up more flags than a badly officiated NFL game. Or at least it used to.
Given the past few rocky economic years, personal bankruptcies have mounted; in 2010 alone, about 1.5 million people filed for bankruptcy. And one off-shoot of that staggering number is that some of the people who cross into your dating radar may be card-carrying members of the Chapter 7 bankruptcy club. Are they damaged goods who should be avoided or just someone who fell into the recession pit and deserves a second chance?
According to Leslie Greenman, financial planner and author of "Dating Our Money," this is a land-mined field that boomers are increasingly confronting. And the simple answer is that there is no simple answer.
To some extent, says Greenman, what matters is the circumstances that led to your suitor's financial mess. She tends to forgive illness and medical expenses if they are the underlying reasons behind someone's bankruptcy. But for those who lived high on the hog until the bill collectors caught up to them, she is less forgiving. You don't fall into heavy debt overnight, she notes. And overspenders, or those who couldn't read the writing on the unemployment wall, are people who may not be smart-enough money managers to warrant making a spot for them in your life.
"If we're talking about someone who filed for bankruptcy protection and still eats out at five-star restaurants and takes luxury vacations, I say run in the opposite direction as fast as you can," Greenman advises.
The ideal date in the bankruptcy pond is someone who owns up to the problem and has a plan to move forward. Avoid those with a victim mentality, says Greenman. "The 'poor me' people -- the ones who say 'everything happened to me, life is so unfair' -- aren't who you want to be with. They'll just bring you down and in these financially challenging times, you want someone who will build you up, not bring you down."
Isn't it a mixed message to say it's OK to date someone who shouldn't be spending money on things you may still enjoy and be able to afford to do?
"Remember what's the most valuable thing in life," said Greenman. "I would chose eating at home or spending the evening browsing around a bookstore with someone I love over a five-star dinner with someone who shouldn't be spending that kind of money."
Here are five no-no's when it comes to dating someone in bankruptcy:
Not a loan to refinance the underwater house, not a car loan because he or she, after all, can't keep taking buses to get around. Your legal obligation to repay that loan may outlive the relationship. By co-signing a loan, you are also tying up your own credit -- something that can easily come back to haunt you. You won't like it when you try to get a mortgage for a retirement condo in Florida but are told that you already have too much credit extended because of the boat loan your former beau or belle talked you into co-signing.
Your friend has already demonstrated that he or she doesn't repay debts, so what makes you think it will happen this time? Pillow talk is just that, talk.
Don't be an enabler. Great if he or she is following a strict budget and too bad that he or she can no longer afford to dine at Spago's every Friday night. But you needn't feel that this means he or she should still go and you be the one to pick up the check week after week. Doing so will only breed resentment on your part and won't teach your friend about how to live within his means. Treating once in a while is fine, but supporting your date's expensive tastes just transfers the problem of overspending to someone else's wallet. Find things you can afford to do together, and keep the big-ticket treats to a minimum.
Don't be blind to the fact that her spending habits may not have changed. Does she still take spa days every month and wants to eat out four nights in a row? Did he renew the lease for the luxury car he can't afford? If it was running up credit cards on shopping sprees that got her in trouble, is her Nordstrom personal shopper still on her speed dial?
Don't curtail your life because of his bankruptcy. You earned your money and the right to spend it. Keep in mind that your own retirement may be just around the corner and you have your own savings to attend to.