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t his investment and trading website, veteran advisor Rick Ackerman asks this question,

“Why is it okay for Morgan Stanley to stop making payments on five buildings in San Francisco, but immoral for a homeowner to walk away from a mortgage that is underwater?”

The answer, my dear readers, is that in fact an individual has the same ability and right to make that choice without feeling guilty about it. Anyone trying to guilt you with the idea of “moral obligation” is filled with hypocrisy and should be ignored. They do NOT have your best interests in mind.

The laws of the United States of America work both ways. Laws and provisions on bankruptcy, credit, debt, loans and other related matters exists as a framework within which you are legally entitled to make a strategic decision that is best FIRST for you and your loved ones, not your creditors, who by the way, are apparently involved in some questionable games with their funds that threaten the stability of the entire financial system of your country.

For the vast majority of business owners facing a financial crisis of some kind, the very first decision they will make to protect themselves, NOT protect their creditors, is to hang on to every dollar of cash it is legally possible for them to hang on to while they are not sure where the next dollar may or may not be coming from. I call that being wise, accepting reality, not irresponsible.

As a business, large or small, for an individual, YOU are your own corporation, YOU are your own business entity. Your name is YOU Incorporated, http://www.YOU.com, and the moment you hit financial crisis, especially financial and unemployment crisis you did not ask for, there is not any question about your “moral” decision to stop paying your creditors. You only need good credit for a mortgage or car loan anyway. Both without which, your life can still pleasantly continue if you must. Accept your reality and make wise decisions. Part with your precious dollars only for things you need.

In terms of business strategy, you have the right to make the same choices as businesses do, even as they may be unpleasant or embarrassing. But you have the same right.

There is only your decision to do what Morgan Stanley does, to do what many other business do as a business strategy decision to survive, to continue into their future, accepting and dealing with the consequences as best you can.

If you are in a situation where owning a home can’t happen, then accept it and rent. Make the wise decision for yourself to hang on to every asset including every dollar that you have to protect and secure your future.

Let me ask you this: Creditors KNEW when they lent you that money in the first place, that there would be a risk of default, DIDN’T THEY?

That’s why they charge you interest!! BOTH parties accepted the laws and provisions providing for risk potential vs. the profit potential when they made you the loan.

Who should eat the loss? You or Them?

I remember the first car I ever bought from a new car dealer. It was a 1983 Toyota Celica and I was a kid in my early twenties. At the closing, the salesman left the room to go talk to the manager. He came back and told me that his boss the sales manager said that if we raised the price of the car just $100, we had a deal!

Guess what I told him? I told him this, in a very friendly yet direct tone:

“If the difference between me buying this car or not is only $100, your dealership can afford to eat the $100 a lot easier than I can.”

Of course he knew I had him and sold me the car. Do what you must, stand firm, and don’t spend one single minute feeling you have somehow violated a moral code and deserve a spanking when you’ve done your best and that is the situation you face. Yes it is unfortunate, but you have an obligation to be wise to you and yours first.

See the Article at The NY Times Here