Losing is Losing

You want to hear a real horror? I started a company in 1993 that has served thousands of clients, now employs 30 people, and is largely unregulated. There are no federal or state laws that specifically contemplate my business model, which seeks to provide a creative, sensible, win-win alternative to bankruptcy*.

Isn’t that awful? We are actually pretentious enough that we would dare to operate and build businesses without the prior stamp of approval from the Emperor.

Oh, there are bad actors, of course–just like in any industry or profession. Two that I know of were outright frauds, and I didn’t shed a tear when they were shut down. Of course, they were shut down under the authority of a simple principle that’s been around for 10,000 years, at least, and was even encoded into law about 3,000 years ago: Thou shalt not steal.

But because the industry has grown and has all sorts of variations and off-shots, it has been determined by the "authorities" that "regulation" is "required".

And, so, I’ve been making trips to Chicago over the last few months to sit around the table with other industry leaders and state commissioners charged with drafting a Uniform State Law. These are the folks who wrote the Uniform Commercial Code (UCC), and things like that.

Anyway, the draft is complete, and once it’s approved by the full Conference of Commissioners in Philadelphia at the end of July, it will go out to the 50 state legislatures. Will it pass? Don’t know.

But even if it does, it’s still a loss, for me. The following is just out in email to an industry email list I own and have run since 1994. A phrase or two is ripped off from a recent email exchange with Billy Beck:


I think it’s important to make a critical distinction, here.

It’s not "fine with me", as you characterize it, but I believe we can probably make it work–though that’s not going to be easy.

Aside from the philosophical implications of having fee caps (really, price fixing) imposed upon us, European style, all this "accomplishes" is to unjustly punish good operators for the misdeeds of bad ones and the alleged misdeeds of others.

If this is what we "need" in order to operate "legitimately", out in the open, and to take away some of the steam from regulators and special interests who have it so easy at our expense, then I’m prepared to grudgingly support it–even though I make a lousy pragmatist.

But I’m not going to applaud them, nor am I going to pretend that they have bestowed any favor upon me. The whole exercise is a fiction. The Emperor still has no clothes.

I entered this with no illusions. I knew that it was not about winning or losing, but only about losing a little less than I otherwise would have. There was really nothing to gain. There was only to mitigate loss.

Everything we had to "gain" was already ours. Thus, we could only lose.

* Paradoxically, bankruptcy is primarily for the benefit of creditors, not debtors.

Richard Nikoley

I'm Richard Nikoley. Free The Animal began in 2003 and as of 2021, contains 5,000 posts. I blog what I wish...from health, diet, and food to travel and lifestyle; to politics, social antagonism, expat-living location and time independent—while you sleep—income. I celebrate the audacity and hubris to live by your own exclusive authority and take your own chances. Read More


  1. Whymrhymer on April 12, 2005 at 09:40

    Its a damned shame but hardly a surprise. Man's basic nature may not be larcenous but you know what they say about 'bad apples' (and I guess the one about 'squeeky gears' may also apply).

  2. Kyle Bennett on April 12, 2005 at 11:52

    This hits home for me, a bit. I'm an eBay Trading Assistant, and the state legislatures are shamelessly salivating over the tens of billions of dollars that are going untaxed. In Tenessee, eBayers are forced to be certified auctioneers, complete with tens of hours of (expensive) training in how to breath properly for all that rapid talking.

    I think it also includes something about livestock care and management, but that may be just an ugly rumor. The sad thing is, that there nothing so absurd that you can assume up front that it is not true.

    I'm in AZ, and safe so far, but I can hear those 16 hooves thundering ominously in the distance.

  3. danieru on April 12, 2005 at 20:27

    change is good

  4. Morenuancedthanyou on April 13, 2005 at 15:13

    Maybe he meant "Getting the correct change is good". Yeah, I could sign on to that.
    My condolances on the imminent shackling of your industry.
    You noted that bankruptcy is primarily for the benefit of creditors. So, that is the reason creditors are extending credit to so many idiots who get into trouble? I don't see the benefit to creditors there. Or do they eventually get their money back? I would like to hear your thoughts about that some time.

  5. Richard Nikoley on April 13, 2005 at 10:03

    "change is good"

    Wow, such depth of insight. I didn't realize that "change" was an intrinsic value of metaphysical proportions.

    Silly me. I always thought that the value or disvalue of any particular "change" was determined by the individuals affected–and that not all affected individuals are likely to value or disvalue a change in the same way.

    How comforting to know that you have it all figured out for everyone. Silly me.

  6. Morenuancedthanyou on April 13, 2005 at 20:08

    Thank you. I am kind of puzzled by your final sentence, though, because it sounds like the "walking-BK" debtor has more control over the creditors' lending than the creditors do. Don't get me wrong, I put primary blame on the irresponsible debtor, but my sympathy fades for creditors who lend to debtors who have histories of irresponsibility. Perhaps I am assuming too much knowledge on the part of the creditors. Not to lecture, but isn't the first rule of lending to know who you are lending to?
    I realize you must be circumspect since present and potential creditor clients are probably reading your posts…

  7. Richard Nikoley on April 13, 2005 at 15:25

    BK is of primary benefit to creditors because it provides an objective point at which they stop throwing good money after bad. The most expensive proposition for a creditor is a "walking-BK" who won't just go file and put and end to it.

  8. Richard Nikoley on April 14, 2005 at 13:50

    A "walking-BK" is someone who is essentially judgment proof, i.e., very difficult to impossible to collect from by forceful means. Debtors are not typically in this state at the time being lent to. They get into that state after borrowing, typically through some hardship such as long-term unemployment, long-term illness, divorces, serious family issues, etc.

    What I'm saying is that when people get in these situations and honestly have a difficult to impossible prospect of repayment, filing BK is actually beneficial to the creditor, as it will save them the time and expense of collection efforts that will bear no fruit.

    Alternatively, people can engage a service such as we've provided for over a decade. We currently settle 200-250 credit card debts per month, worth over $1 million, for an average settlement of about 36 cents on the dollar (and 70% of those settlements are paid over 2-3 monthly payments instead of a single lump sum).

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