Official Carleton H. Sheets^® Website

As an entrepreneur and self-employed businessperson for over 30 years, I realize that business decisions are not always "moral" decisions. I don't mean that most of these decisions are unethical or dishonest, but that they sometimes cause hardships and stress for others. It has always saddened me to hear when companies are forced to lay off employees---especially  valued employees who've worked there for several years. But as a businessperson, I know that it's not a personal choice in most situations ... it's a necessary business decision to help the company survive.

That being said, I could see both sides of the story when I read an article published by The Economist. This article was from a study that measured the "strategic default rate" of borrowers who could pay, but chose not to. And according to the study, the key factors of whether or not these borrowers would default were: (1) if they were "underwater" on their homes (owned more than the home was worth), and (2) moral and social considerations.

Although four out of five borrowers believe that defaulting is wrong, those four borrowers are more likely to default on their mortgage once the negative equity on their home reaches $50,000. The study also goes on to say that people under 35 and over 65 are less likely to believe that default is wrong, as are the well-educated. Furthermore, the likelihood of defaulting on their loan increases if the borrowers know someone else who has defaulted or if they live in a neighborhood where the foreclosure rate is high. Fascinating!

I suppose what we can learn from this study is that some people tend to be responsible and pay their debts---as long as it's financially feasible! I urge you to read the article and follow the links to the study. I found it to be extremely interesting.