You might remember the “Money” episode of the popular NBC sitcom The Office. The character Michael Scott realizes that he is deeply in debt, and he is desperate to resolve it. After receiving some questionable advice from his employee Creed Bratton, Michael walks into the office and shouts: “I declare bankruptcy!”
Read ahead to find out what The Office got right and wrong about personal bankruptcy, and how the licensed trustees at David Sklar & Associates could have made things go a lot smoother.
What They Got Right:
Bad Money Habits Can Lead to Debt
In The Office episode “Money,” the accountant, Oscar Martinez, decides to sit down with Michael to take a look at his financial situation. He goes over his expenses and collects the findings in a graph. The graph is divided into three categories: “essentials” (housing, car payments), “non-essentials” (entertainment, magazines) and “things no one ever, ever needs” (magic sets, professional bass fishing equipment, etc.). The final category is the biggest out of the three. Michael’s impulsive spending has put him deeply in debt.
This is not the only time that Michael’s poor money management has been mentioned on the show. In previous episodes, he admitted to falling victim to a Nigerian Prince scam, losing money in a pyramid scheme, spending his bonuses immediately and much more.
It’s true that bad financial habits can catch up with you. If you don’t nip the problem in the bud early, you could end up in a lot of debt.
Toxic Relationships Can Lead to Debt
While The Office is a comedy, it broached the subject of toxic relationships often. Michael’s relationship with his ex-boss Jan Levinson was undoubtedly toxic, with clear signs of emotional manipulation and abuse. When you watch episodes like “Money” or “The Dinner Party,” you can see that Michael is a victim of financial abuse, too.
While Michael was not very good at managing money on his own, he was definitely pushed further into debt because of his relationship with Jan. Jan pressured him to trade in two cars so that they could have a Porsche. She bought new furniture and décor for his place, dismissing his concerns over the expenses. She made purchases using his credit cards since she had no job or alternative source of income.
To cope with his debts and Jan’s unrestrained spending, Michael takes a second job as a telemarketer in secret. His performances at both jobs start to dwindle. He has no choice but to quit the telemarketing job. He then gets desperate to find a solution for his mounting debts. He considers gambling and illegal activity to get his hands on money quickly. This is all until Creed Bratton suggests that he turn toward bankruptcy.
Financial abuse takes many forms. It can be a partner controlling your finances by withholding money. It can also be when a partner pressures you to make large purchases that you do not want, spends your money without your permission and puts you into debt. If you think that you are dealing with this problem, you may want to contact your provincial financial abuse hotline for help.
You Can Transfer Your Debts
Creed Bratton suggests that Michael declare bankruptcy to get rid of his money problems. Creed then admits that he has transferred his own debt to a fake identity and had that identity declare bankruptcy to get a clean slate. Creed’s strategy is obviously incorrect and very illegal, but a small part of his solution is true: you can transfer your debts to make repayment easier.
When it comes to credit card debt, you can use a balance transfer credit card to either transfer or share the balance with another willing person. This is common for couples that want to tackle money problems together. So, if your spouse or family member wants to help you shrink your balance, you could consider applying for one of these cards.
You should know that creditors usually have eligibility restrictions for balance transfer credit cards, like a minimal annual income or a credit report that’s free of bankruptcies or consumer proposals. If you are eligible, it’s important that you watch out for interest rates and balance transfer fees. These costs can add up. You don’t want to jump into a debt solution that costs you more than you can handle.
If you’re not eligible for a balance transfer card, the easiest way that someone can help you with repayments is to send you the funds so that you can give it to your creditors. They can make an online transfer, send you a cheque or give you cash to deposit into your bank account. All you have to do is take the next step for them and put it towards your debt.
Some people may not be comfortable sending you a large sum without confirmation that it’s gone toward your debt total. In that case, they can contact your creditors to make a direct contribution. They will need to know details like your full name and account number to guarantee that they’re sending funds to the correct account.
So, it’s surprising that Creed Bratton’s advice had a small grain of truth to it. You can technically transfer your debts and have someone else share the responsibility. What you can’t do is follow the rest of his advice, which includes bankruptcy fraud and forgery. As the character Dwight Schrute would say: “Identity theft is not a joke, Jim. Millions of families suffer every year.”
You Can’t Run Away from Your Debt
Oscar convinces Michael that he has to talk to Jan about his debts. They call her, but when she responds poorly to the news, Michael flees the office. The camera spots him sprinting away from the building and toward the nearest railyard. He’s planning to hop on a train and never turn back. Jan eventually finds him and tells him that he can’t run from this problem: “Your creditors can follow you anywhere with ease. Your debt follows you around the world, electronically.”
She’s right. Debt isn’t something that you can run away from. If anything, the longer that you ignore it, the worse it will get. Your balances collect interest. You rack up late fees and penalties. Your services get shut off. Your creditors take action to get their payments. Leaving it alone doesn’t make things easier for you.
So, what can you do? The first thing that you have to do is acknowledge that you have a problem. You can’t move forward if you’re still in denial about your debt. The next thing that you should do is talk to your spouse/partner about it. And finally, you should see a licensed insolvency trustee for help. Our licensed insolvency trustees can assess your financial situation to see whether you should undergo a consumer proposal, a division one proposal or personal bankruptcy.
That’s not all a trustee will do. Here at David Sklar & Associates, we want you to be financially stable long after you finish your proposals and bankruptcy proceedings. We offer credit counselling to guide you toward a healthier financial future. Our website is also filled with great advice like how to qualify for loans after a bankruptcy and how to repair credit scores. We want to help you get back on your feet.
What They Got Wrong:
Michael misunderstood the term “declare bankruptcy.” He shouted “I declare bankruptcy!” into a room and then started cutting up his credit cards.
Saying the words “bankruptcy” out-loud doesn’t do anything. What Michael didn’t realize is that a debtor declares bankruptcy to their creditors and to the Court. They do this by filing for personal bankruptcy with the assistance of a licensed insolvency trustee. Your trustee fills out the required forms, files the necessary documents with the Office of the Superintendent of Bankruptcy (OSB) and notifies your creditors before settling your assets and handling repayments.
Click here if you need to get help filing for bankruptcy and you’re not sure where to start. You can also get informed by taking a look at our blog. We have lots of articles that can answer your questions about personal bankruptcy, debt management and creditor repayment. You can find answers to questions like what is a bankruptcy trustee or do you need a lawyer to file for bankruptcy. Our articles will make things crystal clear.
Money Issues Don’t Disappear
After the “Money” episode, Michael’s “bankruptcy” is not given any attention. If he had officially filed for personal bankruptcy, he would have to go through the process and make some lifestyle changes. If he hadn’t filed, he would still have to deal with a substantial amount of debt.
But there is no mention of a solution. If anything, The Office showed that Michael didn’t learn from the experience. He continued to make rash financial decisions and spend far beyond his means.
For instance, in Season 6, in the infamous episode Scott’s Tots, Michael is confronted with his past promise to pay the college tuition fees for a large group of teenagers. The extravagant promise shows his impulsive views with money, along with his ignorance about tuition fees. The episode was first released in 2009. So, the costs to go to college in the United States at the time were on average $41,040 for a private institution and $17,830 for an in-state institution. That’s for a single student.
Michael admits that he can’t afford such an incredible cost and dashes the dreams of all of the students. He tries to offer laptop batteries as a compromise. When that doesn’t work, he offers to pay for one student’s textbooks, promising a $1000 cheque per year. It’s a tiny fraction of what he originally promised, but he still admitted that he would struggle to find the room in his budget for the expense.
Another good example is in the episode Garage Sale (Season 7), Michael reveals that he intends to propose to his girlfriend, Holly Flax. He shows off the extravagant ring to his coworkers, saying that he only followed the “three years’ salary” rule when buying the ring, gravely misunderstanding the common belief that you should spend two to three months of your salary on the ring. This means he spent an unbelievable amount of money — or more likely, took out a very large loan — to make a romantic gesture.
The sitcom may have dropped the ball when it came to Michael’s bankruptcy, but it did a really good job of showing that bad habits are hard to break. Michael realized that he’s gotten himself into deep trouble because of poor financial decisions, but he doesn’t take that information to heart. He keeps making the same mistakes over and over.
Here at David Sklar & Associates, we offer credit counselling services to help our clients break those bad money habits. Your trustee will focus on your biggest problem areas so that you can make better financial decisions in the future.
David Sklar & Associates:
Residents of the Greater Toronto Area have had their lives turned upside-down by the pandemic of COVID-19. Here at David Sklar & Associates, we understand that many residents have been thrown into financial instability because of this health crisis and are concerned about what to do next.
If you need financial help, we are still here for you. We offer over-the-phone consultations and electronic document signing so that you can access our services from the safety of your home. We want to encourage our clients to prioritize their health as best as they can during these uncertain times.
Watching The Office is more educational than you’d expect. The episodes may not have every financial fact down pat, but they do have some nuggets of wisdom to share. You can take some of their lessons to heart, like bad money habits can lead to debt and you can’t run away from your financial problems. In between those hilarious jokes and awkward moments, there is some good practical advice.
But you can’t look to a sitcom to help you with all of your financial matters. When you want to learn the real facts and deal with your debt, you should come to David Sklar for help.