Judge Learned Hand and the "Hand Rule"
May 1, 2021
Can you imagine if your last name was "Hand" and you had a baby- in this instance, a boy- and you named him "Learned?" Well, there was such a man. Many would say Learned Hand was America's most famous judge. He was never on the Supreme Court, but he is quoted more often than any other judge in America. He was born in 1872 and passed away in 1961.
Every day I talk with lower in-come seniors and persons on dis-ability with old debt worried about financial matters. Often, they want to know what it would take to pre-vent this or that thing from happen-ing. They might be worried about losing their income, if someone could take their home, or any other number of things. Many want to do whatever they can to prevent some-thing bad from happening to them financially.
There is one principal or formula Learned Hand expounded on that would be good for any of us to re-member. It is sometimes called the "Hand Rule." It was written to apply to what constituted negligence, but its principal can be applied to many decisions we might need to make in our lives. Here is a simple explanation:
Does the "cost" of what you want to prevent from possibly happening in your life, exceed the possibility of that thing happening, times what the ultimate harm or damage of the thing you are worried about? If the "cost" exceeds the probability x possible harm, then you shouldn't pay the cost.
More simply put does the cost to prevent a possible harm make sense? Carried to the extreme- would you spend the money to buy an armored car to drive to the store because you are worried a gun somewhere might accidently go off and hit you while you are driving to the store? Of course not. We all live by the "Hand Rule" whether we think about it or not.
I will explain this in practical terms as it may apply to lower in-come seniors worried about debt. Is the "cost," meaning continuing to make payments on debt you can't afford, living destitute, greater than the possibility of receiving a judgment and then a garnishment of income if the debt is not paid. The answer is easy. Yes, there is a possibility of being sued if debt is not paid, but social security and retirement income is protected by law and can't be garnished. Therefore the "cost" of keeping up with old debt exceeds any possible harm- simply because a senior's income is protected so they can't be harmed. The senior can logically choose not to pay the credit card debt they can't afford.
Seniors, like everyone, want to pay their obligations. According to the Kaiser Foundation, nearly half of seniors over 65 have incomes within 200% of the poverty line. Many are classified as economically vulnerable and owe debt they simply can't af-ford to pay. Lawmakers have passed laws that protect social security and other retirement income. Struggling seniors deciding between medicine and debt should rest easy. Their in-come can't be taken or garnished even if a collector has a judgment. It is protected because as a society we want seniors to be able to take care of their basic needs like food, shelter and medicine.
Eric Olsen is Executive Director of HELPS Nonprofit Law Firm. HELPS is a nationwide 501 c charitable law firm that protects seniors and disabled persons receiving social security, pensions and disability from un-wanted collector contact and educates seniors how they can maintain their financial independence. No qualified senior is ever turned away. http://www.help-sishere.org