Last week, we flagged the harrowing story of Edmund Andrews, the New York Times economics reporter who got himself into a debt nightmare and defaulted on his mortgage.
The central tension of that story, you may recall, was the gulf between Andrews’ attitude toward his money problems (understandable panic) and the attitude of his new wife Patty (whatever). This tension was made more unsettling because Patty seemed to be responsible for much of the overspending.
The marriage tension aside, the story seemed like a got-carried-away could-have-happened-to-anyone saga that many Americans could relate to, especially in an era in which “everyone was doing it.” But as the Atlantic’s Megan McArdle has discovered, there were key details that Andrews left out.
Specifically, Andrews’ wife Patty has had this problem before. Twice.
At the end of his book’s harrowing account of mortgage mistakes and credit card crises, Edmund Andrews writes: “While our misadventure had certainly been more extreme than those of many other Americans, our situation was not all that unusual.” And indeed the book reads like the story of an American Everyman, easily sucked in to the alluring world of easy credit as he struggled to blend a new family. The terrifying implication is that it could happen to you–to anyone who leads with their heart and not their head.
But en route to that moral, it turns out the story has been tidied up a little. Patty Barreiro, Andrews’ wife, has declared bankruptcy twice. The second time was while they were married, a detail that didn’t make it into either the book or the excerpt that ran in last Sunday’s New York Times Magazine.
Andrews’ desire to shield his wife is understandable–hell, laudable. No decent person wants to parade their spouse’s financial trouble in front of the world. But this is material information that changes the tenor of his story. Serial bankruptcy is not a creation of the current credit crisis, and it doesn’t just happen to anyone, particularly anyone with a six figure salary.
In September 1998, California bankruptcy court records indicate that Patty and her first husband declared bankruptcy… The bankruptcy code requires filers to wait 8 years after a previous Chapter 7 discharge. [In 2007], barely four months after she became eligible, Patty Barreiro filed again. And the filing shows some suggestion of strategic debt management…
Serial bankruptcies can, of course, happen to anyone with enough bad luck. But they usually don’t. And when they do, they usually hit people with marginal incomes that leave no margin for error in the budget. Most people, even in LA, are able to build a sustainable budget out of an income in the low six figures.
Moreover, pesky bad luck isn’t really the picture painted by either filing. Rather, Ms. Barreiro seems to have spent most of the last two decades living right up to the edge of her income, and beyond, and then massively defaulting. If you structure your finances so that absolutely everything has to go right, it’s hard to blame the mortgage company when you don’t quite make it.
Needless to say, these details change the story. We understand why Andrews omitted them, but we also feel more than a little misled.
Photo excerpt: The New York Times