Why Debt Management Sounds Strange

The idea of managing your debt rather than eradicating it is foreign to many people. lf you have Depression-era parents or grandparents, you may have heard their tales of once-wealthy folks losing everything because of debt. In those days, lenders could "call" loans at will, demanding immediate repayment. As the economy crashed, many did so, meaning that people who had mortgages could face losing their home even if their payments were current.

But the roots of our unease go even deeper. Long before Ben Franklin opined, "So rather go to Bed supperless than rise in Debt," Americans believed there is something shameful about owing money. In colonial times, excessive debt was a crime that could land you in jail where you would remain until you, or your family, somehow paid what you owed. More than a few people died of the rampant disease and terrible conditions that typified prisons of that era.

Debtors’ prisons weren’t outlawed in the U.S. until 1841, and bankruptcy continued to carry a huge stigma until the end of the 20th century.