A Fighting Chance (6 page)

But the part Daddy had a hard time with was talking about money and, especially, bankruptcy. For years after I first began teaching that part of the law, I don’t think my daddy ever spoke the word
bankruptcy,
at least not when I was around. Whenever one of my uncles or the guy at the hardware store asked what my speeches were about, I noticed that Daddy would look off and say something like “Oh, she’s special, that one. We never had to worry about her.” And then he would move on to something else.

Maybe it was personal. My daddy and I were both afraid of being poor, really poor. His response was never to talk about money or what might happen if it ran out—never ever ever. My response was to study contracts, finance, and, most of all, economic failure, to learn everything I could.

My daddy stayed away from big sores that hurt. I poked at them.

When “Dead Broke” Is a Step Up

As I dug deeper into my study of bankruptcy and the new law, I kept bumping into the same question over and over: Why were people going bankrupt? I couldn’t find solid answers anywhere. In those days, almost all young law professors specialized in theory. They wrote articles and books about the theory of this and the philosophy of that. But theory wouldn’t provide answers that anyone could count on, answers that would explain what had gone wrong. I clung to the idea that the people in bankruptcy were different and everyone else would be safe. I might not have said so at the time, but I think I was on the lookout for cheaters and deadbeats as a way to explain who was filing for bankruptcy.

As my search got under way, I found two terrific partners. Terry Sullivan, a newly minted PhD, was a bright young star in the Sociology Department at UT. (Terry went on to an amazing career, winding up as the first female president of the University of Virginia.) Jay Westbrook was already a bankruptcy expert, and by the time we met he had practiced law for eleven years. (Jay has also had a remarkable career; he is a renowned bankruptcy scholar and the hands-down expert on international business law.) But back then we were just three young professors who were excited about putting together the kind of study that legal experts almost never did. We decided to collect hard data about families that went broke.

Terry led the way as we developed a sampling protocol, drew up a list of the data we wanted to get, copied cases, recorded numbers, and began to create a database. I’d never been involved in a project like this—a careful, systematic collection of information that would form a picture of the people who filed for bankruptcy. It was the statistical equivalent of building a giant mosaic, one tile at a time.

During the data collection phase, I visited an old paneled courtroom in San Antonio. It was summer, and the air-conditioning was cranked down to freeze-your-toes-in-one-minute-or-less. Back then, people still had to come before a judge to get a decree forgiving their debts. (Nowadays, the process usually happens by mail.) I sat in the back, shivering.

The judge sat higher than everyone else, although I barely noticed him and he didn’t pay any attention to me. My eyes were on the people who moved in and out of the courtroom. I guess I had so completely absorbed the prevailing wisdom that I expected people in bankruptcy to look scruffy or shifty or generally disreputable. But what struck me was that they looked so
normal
.

The people appearing before that judge came in all colors, sizes, and ages. A number of men wore ill-fitting suits, two or three of them with bolero ties, and nearly everyone had dressed up for the day. They looked like they were on their way to church. An older couple held on to each other as they walked carefully down the aisle and found a seat. A young mother gently jiggled her keys for the baby on her lap. Everyone was quiet, speaking in hushed tones or not at all. Lawyers—at least I thought they were lawyers—seemed to herd people from one place to another.

I didn’t stay long. I felt as if I knew everyone in that courtroom, and I wanted out of there. It was like staring at a car crash, a car crash involving people you knew.

Later, our data would confirm what I had seen in San Antonio that day. The people seeking the judge’s decree were once solidly middle-class. They had gone to college, found good jobs, gotten married, and bought homes. Now they were flat busted, standing in front of that judge and all the world, ready to give up nearly everything they owned just to get some relief from the bill collectors.

As the data continued to come in, the story got scarier. San Antonio was no exception: all around the country, the overwhelming majority of people filing for bankruptcy were regular families who had hit hard times. Over time, we learned that nearly 90 percent were declaring bankruptcy for one of three reasons: a job loss, a medical problem, or a family breakup (typically divorce, sometimes the death of a husband or wife). By the time these families arrived in the bankruptcy court, they had pretty much run out of options. Dad had lost his job or Mom had gotten cancer, and they had been battling for financial survival for a year or longer. They had no savings, no pension plan, and no homes or cars that weren’t already smothered by mortgages. Many owed at least a full year’s income in credit card debt alone. They owed so much that even if they never bought another thing—even if Dad got his job back tomorrow and Mom had a miraculous recovery—the mountain of debt would keep growing on its own, fueled by penalties and compounding interest rates that doubled their debts every few years. By the time they came before a bankruptcy judge, they were so deep in debt that being flat broke—owning nothing, but free from debt—looked like a huge step up and worth deep personal embarrassment.

Worse yet, the number of bankrupt families was climbing. In the early 1980s, when my partners and I first started collecting data, the number of families annually filing for bankruptcy topped a quarter of a million. True, a recession had hobbled the nation’s economy and squeezed a lot of families, but as the 1980s wore on and the economy recovered, the number of bankruptcies unexpectedly doubled. Suddenly, there was a lot of talk about how Americans had lost their sense of right and wrong, how people were buying piles of stuff they didn’t actually need and then running away when the bills came due. Banks complained loudly about unpaid credit card bills. The word
deadbeat
got tossed around a lot. It seemed that people filing for bankruptcy weren’t just financial failures—they had also committed an unforgivable sin.

Part of me still wanted to buy the deadbeat story because it was so comforting. But somewhere along the way, while collecting all those bits of data, I came to know who these people were.

In one of our studies, we asked people to explain in their own words why they filed for bankruptcy. I figured that most of them would probably tell stories that made them look good or that relieved them of guilt.

I still remember sitting down with the first stack of questionnaires. As I started reading, I’m sure I wore my most jaded, squinty-eyed expression.

The comments hit me like a physical blow. They were filled with self-loathing. One man had written just three words to explain why he was in bankruptcy:

Stupid.

Stupid.

Stupid.

When writing about their lives, people blamed themselves for taking out a mortgage they didn’t understand. They blamed themselves for their failure to realize their jobs weren’t secure. They blamed themselves for their misplaced trust in no-good husbands and cheating wives. It was blindingly obvious to me that most people saw bankruptcy as a profound personal failure, a sign that they were losers through and through.

Some of the stories were detailed and sad, describing the death of a child or what it meant to be laid off after thirty-three years with the same company. Others stripped a world of pain down to the bare facts:

Wife died of cancer. Left $65,000 in medical bills after insurance.

Lack of full-time work—worked five part-time jobs to meet rent, utilities, phone, food, and insurance.

They thought they were safe—safe in their jobs and their lives and their love—but they weren’t.

I ran my fingers over one of the papers, thinking about a woman who had tried to explain how her life had become such a disaster. A turn here, a turn there, and her life might have been very different.

Divorce, an unhappy second marriage, a serious illness, no job. A turn here, a turn there, and my life might have been very different, too.

You’re Not That Funny

One early spring morning in the mid-1980s, a shocking rumor floated around the UT faculty lounge: There had been a total of seven failing grades handed out in the preceding term, and they had all come from one professor. I didn’t say anything, but I knew who the professor was. I’d taught two large classes, and a few knuckleheads had thought they could skate through without working hard. They had miscalculated. In fact, exactly seven of them had miscalculated.

I took teaching seriously. The students who showed up in my classroom would soon graduate and go out in the world with incredible power, perhaps more than they realized. They would handle other people’s money, other people’s businesses, other people’s lives. On the first day of class, I always made the same promise: If the students worked hard, I would bust my tail to teach them the material. And though I never doubted for a moment that they could learn it, I was dead serious about the “students work hard” part.

By now I had been teaching at UT for a while, and I thought it was going pretty well. I was starting to feel more confident. When the public schools were closed one day, I decided to take seven-year-old Alex with me to my class. I settled him in the back row with a new
Star Wars
sticker book, and then I taught a great class—hard work, but plenty of lively exchanges and some jokes to keep everyone engaged.

After class, Alex and I were walking hand in hand down an empty hallway back to my office. The afternoon sun was slanting in through the windows, and I thought it was a perfect mother-son moment. I was smiling and relaxed. “So, sweetie, what did you think of my class?”

Alex paused a long time, clearly considering his words. Finally he said, “Mom, you aren’t that funny.”

I felt stabbed in the heart. Before I could think, I cried out, “But, sweetie, they laughed.”

This time he didn’t hesitate. “They had to, Mom.”

Huh. I guess I still had a lot to learn.

Punch Back

Over time, I started wrangling with a number of academics and others about banks and bankruptcies. Whenever I heard someone claim that the bankruptcy courts were loaded with cheaters and lazy slugs who wanted the easy way out, I started fighting back. This was not a good way to make friends, but to me that didn’t seem especially important.

I started giving more speeches. I was invited to participate in a panel discussion at a gathering of bankruptcy judges in Chicago to talk about how the courts should treat small businesses that go bankrupt. One of the other panelists was a well-known judge who essentially declared that when small-business owners hit financial trouble, they should just turn their businesses over to the bank.

This seemed deeply unfair. Did he have any idea how hard people worked when starting a business? Big businesses that fell on hard times were given lots of special protections by the bankruptcy courts so that they could restructure and keep going. Why shouldn’t little businesses have the same chance to survive?

The judge and I were seated at a table on a small stage, and we got into such an intense back-and-forth that the other panelists started inching away, leaving the two of us to jockey for a single microphone placed between us. The judge probably had a hundred pounds on me, and he started shifting himself closer to the microphone and edging me out of his way. I grabbed the table for leverage and pushed my way to the microphone, going shoulder to shoulder with the judge as I hit back with arguments about giving everyone the same chance to rebuild. As we escalated the fight, we leaned harder and harder into each other. The scene was rapidly becoming more than a little ridiculous, but for me this didn’t feel like just another theoretical debate. I felt I knew the people he was dismissing so easily. I thought they were worth fighting for.

I glanced over and noticed with satisfaction that the veins in his neck were throbbing and his face was red and sweating. I wondered briefly whether he might have a stroke right there on the small stage.

It was not a nice thought for a suburban mom who tended roses and dutifully brought chocolate-oatmeal cookies to every church bake sale.

Leaving Texas

In 1985, the University of Pennsylvania called to ask if I would be willing to interview for a job opening. The next year, independently, they called to ask Bruce if he would consider interviewing for a different job opening. It took a while for us to work it all out, but the law school needed two professors—someone to teach contract law and bankruptcy and someone to teach legal history. Two good jobs in the same city—finally!

I should have been thrilled, but I wasn’t. Penn was a great school, but Philadelphia felt like a million miles away from my brothers and all my assorted nieces, nephews, and cousins. And the prospect of moving two kids, my parents, Aunt Bee, and two dogs seemed overwhelming. But Penn was a great place for a legal historian, and they promised to support my bankruptcy research. And Bruce’s commute to St. Louis was hard on all of us. So after a lot of discussion, we decided it was time: Bruce and I took jobs at U Penn in the fall of 1987. We bought an old stone house about five miles from the U Penn campus. It hadn’t been updated in decades, but it was big and roomy.

Aunt Bee was packed and ready. She was eighty-six now, and she and Bonnie the cocker spaniel were eager to come live with us. But as we started preparing for the big move, Daddy said he and Mother had decided to stay in Austin a while longer.