I’m late to the “Breaking Bad” party. As I write this, there are only four episodes remaining in the show, and I’ve only recently started watching it from the beginning. (I’m currently on Season 2.) It’s a great show, with fantastic writing, and I’m burning through the episodes quickly. Its writers excel at putting the characters into, and getting them out of, difficult situations.
Still, there’s something about the show’s basic premise that I have trouble with.
Early on, Walter White is motivated to start producing methamphetamine to prevent his family from being saddled with debt after what he assumes is his impending death.
What Walter seems not to know is that medical debt, and the credit cards Skyler uses to pay the doctors, are unsecured, non-priority debts. They are subject to discharge in a bankruptcy case.
It’s a sad fact that medical debt plays a role in approximately half of all consumer bankruptcy cases. If Skyler were eventually to file a bankruptcy case, that debt would be treated in her case just as it is in all those other cases. Her liability to repay would literally be gone.
But something else also got me thinking about potential a bankruptcy case for her: In one episode, Walter mentions a home equity line of credit, or HELOC.
The show doesn’t say, but I strongly suspect that the White’s house is worth less than what they owe on their first mortgage. Here’s why that’s important:
One of the greatest benefits of filing a Chapter 13 bankruptcy case is the possibility of “stripping” junior liens such as HELOCs and second mortgages. The idea is that if your first mortgage eats up all the equity in your house, there is no equity to secure a second lien. The second lien is “stripped,” and thus becomes ordinary unsecured debt just like medical bills or credit cards, i.e. subject to discharge.
I really wish that Walter was aware that Skyler wouldn’t necessarily have to be buried in debt. I wish he was aware that she could accept the Bankruptcy Court’s helping hand, and eliminate all those medical bills, credit card bills and that second mortgage. If he were aware of that, Walter might spend what he thinks are his final days in the company of his loving family, not in the awful practice of cooking meth.
But then again, if he did that, we wouldn’t have this great show to watch.