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Irony of leading nation in bankruptcy filings

Lessons of pioneer thrift still applicable today

Despite being established upon principles of thrift, frugality and moral integrity Utah, ironically, leads the nation in bankruptcy filings.

The pioneer adage to, "Use it up, wear it out, make it do, or do without," has given way to enjoying all that the bank's money can buy — with zero down and 48 months to pay.

Blame it on credit cards maxed-out to their limits, proposed bankruptcy reforms, medical costs or simply trying to maintain a certain lifestyle, an increasing number of Utahns are turning to the courts to escape mounting debts.

Many Americans and members of the Church are drowning in a sea of debt. Roughly one home in 34.5 will file for bankruptcy this year, making Utah the insolvency capital of the nation. Nationally, one in 69 homes will file.

Unlike our grandparents who worked on a cash basis and divided their monthly income into envelopes of different expenses, said Einar Schow, today's family budgets are often electronic, allowing budgets to be fluid.

"When our grandparents were out of money, they knew it," he said, explaining that electronic budgets can make it easy to borrow from the future.

Brother Schow of the Alpine 9th Ward, Alpine Utah Stake, is president of a company that assists people in the elimination of debt. He sees many people, including members, charging headlong into problems because they don't abide by sound financial principles.

"We have the idea that if we make payments on time, that we're doing OK. But we're really in trouble long before we know it.

"Income levels are high; as long as we maintain our income then we can make payments. But applying our whole paycheck to debt payments leaves nothing for savings. If income is lost, then we have nothing to fall back on."

Brother Schow noted how personal budgets in the West region of the country are spending an average of $430 more per month than they earn. "That's a staggering figure," he said. "There's no surprise why we're going into debt.

"We're no longer a patient generation. We look around and want what others have. In the gospel, we learn to allow the Lord to provide. But we want things now. Today, we'll walk into the store and finance a VCR for $11 a month and think nothing of it. Pretty soon, it adds up."

Another problem with easy credit, believes Brother Schow, is the filing for bankruptcy as an easy alternative. Bankruptcy has "become a convenience item," he said.

"Just sign a few papers and the debt's cleared," said one young married couple after financing their new home, complete with lavish furnishings, and declaring bankruptcy.

Speaking during a devotional June 4 at Brigham Young University, Elder Sheldon F. Child of the Seventy quoted from Doctrine and Covenants, section 21, urging students to follow the prophet in "all patience and faith."

"Does it take patience and faith to follow the prophets?" he asked. "Of course it does. His counsel may interfere with our lifestyle. He may say things that we don't want to hear."

He quoted President Gordon B. Hinckley who said, "So many of our people are heavily in debt for things that are not entirely necessary. . . . I urge you as members of this Church to get free of debt where possible and to have a little laid aside against a rainy day."

Some debt is necessary, Elder Child said. "But there are too many people who do not differentiate between wants and needs." He then quoted findings of Britt Beemer, chairman of America's Research Group who estimated that the under 30 age group has an average credit card debt of $10,000 to $12,000, up 50 percent from five years ago.

"This is a frightening statistic," Elder Child said. "When we assume personal debt, we are gambling on our future earnings. This can be very dangerous. A poor economy, unemployment, natural disasters, illness or other emergencies can affect our lives and make it difficult, if not impossible, to repay those debts.

"The real key is individual commitment," he said, quoting an editorial in the Deseret News. "People need to discipline themselves in a way that does not put themselves financially at risk.

"We teach the importance of self-reliance. It is a prerequisite to service and giving. Each of us must become self-reliant before we can effectively help others," Elder Child said.

Terry Greenman of the Daniel Ward, Heber City Utah East Stake, heard President Hinckley in general priesthood meeting call on members to get out of debt, and came home with a determination to pay off his nearly $80,000 credit card debt.

He had lived off credit cards while getting established in business. "It was a mistake to live off credit cards. I'd do it differently if I did it again," he said.

His business efforts paid off and he was able to rid himself of debt, owing nothing on credit cards or his home mortgage. "Living within our means has made a huge difference in the freedom of our lives," he said.

"I'm convinced that when we do as the Lord wants, revelation comes," he said. "But if we take care of our wants first, then we get in the way of the Lord blessing us. We are blessed as we follow the prophet."

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