6 - A Clean Slate

Summary

This chapter deals with those debtors who achieve that which is so desired by so many, and we shall see the final components of the struggle to join an insolvency programme, which will write down some of their debt and restructure the remainder to be more manageable. This is assuming they can complete their time on the programme, which generally lasts 3– 5 years and requires the debtor to live according to their Reasonable Living Expenses (RLEs). These requirements match international standards, with the objective of RLEs (or their international equivalent) being to teach the debtor financial literacy and minimize the chance of financial recidivism (White 2010; Walker 2011; Ramsay 2017). In the US context, for example, all bankrupts must take a mandatory financial literacy course before their debts are written off. No exceptions are made to this rule, resulting in cruel absurdities, such as a woman being required to complete a financial literacy course when the reason for her bankruptcy was the death of her child and the hospital bills associated with their end-of-life care (Debt Collective 2020; Oliver 2021).

The term ‘clean slate’ has a convoluted history, originally coming to us from the Romans who had wax-covered tablets (tabula) which were cleared (rasa) by heating the wax and smoothing it (Geisst 2013). Usually in the social sciences and humanities the phrase ‘clean slate’ refers to the nature versus nurture debate over which whole libraries have been filled, with argument and counterargument presented over the relative merits of genetics and socialization (Graeber 2011). In the indebted context, we are of course talking about something quite different, where the clean slate represents a write-down of debt. Incidentally, debtors still think clean slate status has been achieved even if they only receive a partial write-down. The clean slate has a legendary, almost mythic reputation among the debtors who seek it out. It is described in hushed and reverent tones, and as debtors come closer to it, the use of salvific language increases. Phrases used include ‘miracle’, ‘life changing’, ‘saved’, ‘lifeline’, and so on.