um, as expected, this makes you and your wife look worse than before...and is another exercise in blameshifting

You, the economist writer for the NYTimes, advised your wife to declare bankruptcy to avoid paying back her own sister?

Either it's another lie, or it is insane advice. Only two options.

Was there a court judgement?

Was there a contract?

And in what universe do you expect us to believe that your wife didn't know she wasn't paying taxes for 5 years.

Didn't care was more like it.

Thank you for sharing your story, Ed, and thank you for offering it up to your viewers/readers with taste, Paul.

It takes quit a person to persevere as you have, Ed. Your families from both marriages will have learned valuable lessons regarding integrity and humility, and will be better people for it.

Hang in there!

If we can get to the REAL BOTTOM of this story, including, in particular, all the comments of my teacher, Dr. Hugh Ching, we might just get the problem of our chronicle financial crises solved. Reporters are responsible to dig into the real cause of the current financial crisis. The accusations of "sleeping on the job" by economics reporters are justified. I believe that the crisis is caused by the Federal Reserve. Generally, knowledge and gossip should, at least, have equal time. Write another book on knowledge! Kind regards, Chien Yi Lee, student of post-science, 5/22/2009

Paul, thanks for the great piece (and kudos to Mr. Andrews for sharing the story and the explanation here).

Btw, it's interesting that NYT is doing so much 1st person journalism these days. I guess there are times when the reporter becomes the story.

Accepting all the facts as stated above, McArdle should not have published her detractions without checking with you first and receiving an answer of some kind. To publish without doing so is irresponsible and mean spirited, and done presumably in the service of ego and competitive instincts to gain position on the Web, and is the kind of thing which the Web threatens to cloud the process of news gathering if the Times ever falls. So this kind of thing is one reason to hope the Times in print stays with us. There is a sense of decency and reliability and maintaining professional and social standards which it will be very discomforting to lose. That sense is in fact what makes it especially worthwhile for a reporter in the Times to write an account of how he was misled into "Bust"dom, as against some other author.

One says this despite the failings of the Times, which has stumbled in fact checking and in complete coverage of some topics, but which is still the best paper in the US in terms of tone and content.

I'm trying to follow the story, but I had a question/observations:

If the wife made no income, she would not be required to file a return. I would guess the ex-husband wanted to file jointly for its tax advantages. But if he never filed, he alone would have the tax liability as the only principal in the production business, and as the only one with income. So why would she have to file bankruptcy?

As for the wife's sister. She must be one mean son-of-a-gun to stalk and sue a sibling over a debt that she knew the sister couldn't pay.

For Ed Andrews: Thank you for your honesty detailing how this financial snowball got out of control.
I hope you and your wife will hang in there through all this and are able to continue building the life you have begun with both your sets of children. That's the important thing and I wish you all the best.

I applaud Mr. Andrew for sharing his story. Unfortunately a lot of folks are in the same boat, but at least he was honest and brave enough to take responsibility for his choices. Too bad more don't rip a page from his book including Megan McArdle. People are so quick to accuse others before getting all the facts or practice charity. I wish Mr. Andrew and his wife the best.

Is he serious? Yhis story keeps getting uglier....her sister sued her? Mr. Andrews continues to sound like a love blind fool he can't grasp that he married a finanancially irresponsible woman.

How did she come in to the marriage with nothing? No home equity after 20 years in LA? This women and her ex seem to have been financially out of control for a long time.

Hopefully this book makes enough to keep them together for awhile. My guess is this marriage ends with everyone broke.

Mr. Andrews: Why not try emailing Ms. McArdle? That's how these newfangled bloggers sort of work!

McArdle responds here.

I found it odd that there were repeated references to Megan's political views. Her stated position on bankruptcy is that it is a good thing America is the most forgiving country when it comes to that sort of thing (I can't say I agree). Her other positions which may be libertarian (and real libertarians, as opposed to glibertarian apologists for statism, might dispute those) don't seem all that relevant.

The response holds no water. First of all an "innocent" wife whose husband failed to file his taxes is usually not liable for his debt. Taxes are usually not dischargeable in bankruptcy.

How much money could she have borrowed from her sister to lead to a second bankruptcy and alienation from her sister? What did she spend the money on?

There is much unexplained about the two bankruptcies, and the probable massive spending by the wife for something yet unexplained.

He should be more truthful and forthcoming.

Being a reporter for the New York Times is one of the best job in the world. A lot of people (including yours truly) regard Mr Andrew as 'blessed. His confession to being a 'mortgage cheat' and then subsequently trying to cash out by writing a book elicit a lot of negative emotions. The failure to declare that Ms Barreiro declared bankruptcy twice compounds the problem, even if it may not be material to the book. I understand the desire to protect the reputation of your love one, but once the public spotlight focus on your family all kind of information will become public. It would have been better to disclose the information.

Desperation does not preclude greatness. Ulysses S. Grant's famous memoir would never have been written if he was not in dire financial strife. There have been many literature written on the finance side of the sub-prime crisis, but I have yet to see a good account from the consumer's point of view. I have ordered the book from Amazon, and I hope my purchase would help the author, however small my contribution may be. A foreclosed property hurts everybody.

On a side note, the tags on the book on Amazon is.. interesting.

The claim that it 'obviously' had nothing to do with your current financial mess falls flat.

What did she learn from two bankruptcies? She certainly didn't develop a fear of undue levels of debt. It seems like she learned that bankruptcy is just what you do after your debts get too high.

Sorry man, your book and your article are a fraud.

Here is SOME ADVICE for Ed Andrews and his family: STOP SPENDING MONEY. DO WITHOUT. TAKE AN EXTRA JOB. STOP BEING AN ELITIST. STOP THE CABLE TV. STOP THE TELEPHONE EXTRAS. TURN DOWN THE HEAT. HANG YOUR CLOTHES ON THE LINE TO DRY. SACRIFICE. CUT. CUT. CUT. YOU ELITIST BASTARDS DO NOT KNOW HOW TO STOP SPENDING. NO PITY. NO SYMPATHY. WE ALL HAVE PROBLEMS. STOP WHINING. YOU WROTE THE BOOK TO MAKE MONEY. IT WILL BE ON THE DISCOUNT SHELF IN 2 WEEKS, AVAILABLE FOR $2.98. The arrogance of the liberals is stunning. No one cares. No one.

Why did you feel the need to emphasize McArdle's political leanings, but not Andrews'?

McArdle has already responded to Andrews' self-serving, incomplete, and frankly dishonest response:

http://meganmcardle.theatlantic.com/archives/2009/05/edmund_andrews_has_responded_t.php

I liked his article--as, ironically, did McArdle--but this response is disgusting in its mendacity. For outlets as serious and respectable as the NYT and PBS to publish his backtracking and excuses without any further fact-checking follow-up is irresponsible at best.

"Without an alternative, Patty had no choice but to seek bankruptcy protection."

"No choice"? Cutting out the $700 J. Crew and Gap shopping sprees wasn't an option? Hey, it's only her own sister that she was stealing from!

"None of this has any connection to our story."

You don't see how different debts are connected? Really? I'm starting to understand how you could spend $3000 more than you had every month: you apparently think a take-home of $2700 means you can spend $2700 on a house AND $2700 on clothes AND $2700 on vacations AND on and on. After all, it's not as if one debt has any connection to the other, right?

TGGP:

"I found it odd that there were repeated references to Megan's political views."

and

Kevin Larrimor:

"Why did you feel the need to emphasize McArdle's political leanings, but not Andrews'?"

Andrews doesn't have political views, he's a NY Times reporter. He just believes what good people who listen to NPR and watch PBS believe.

Megan's views let you know that you can disregard what she says. She probably doesn't even listen to NPR.

I do not understand why this guy still has a job, and it surely reflects badly on The Times! I know all papers are having a hard go of it now, but this is somewhat appalling. The qualifications for economics columnist for the Times appear to be nothing more than an ability to present some sort of information (leaving a few inconsequential bits out) and having the right social connections. I have been retired for some time, but this story makes me want to make a career change and jump back into the job market, this time as an economics columnist.

Ed Andrews appears to be in need of a lot of counseling himself, and not only economic. Sounds like his current wife was the first of many recent bad decisions. Her sister sued her? Wow! Is the sister a rotten human being or did she just feel that her sister, Ed's new wife Patty, had been getting away with too much for too long. The Times in its desperation, seems to be veering into the world of airing dirty laundry. Not a first of course.

Anyway, another fascinating piece, Paul. I absolutely love all your stories for the Newshour. They are so much fun. Information and fun, what more could one ask. Thanks

Did Andrews tell either his NYT or book editors about the omitted information?

Personal tax debts are not generally dischargeable under bankruptcy law.

Even back in 1998, she would have qualified for innocent spouse relief w/o having to file bankruptcy herself (much less jointly)

I suspect the debt in the first bankruptcy is consumer credit, not tax, debt.

Just a few random thoughts:

I agree that Ms. McArdle's political views are irrelevant to her reporting.

At one point in this saga mortgage broker Andrews worked out a kind of consolidation loan to help with the credit card debt.
Was any attempt made at that point to pay back the sister/sister in law? It's one thing to stiff the big bad mortgage company, but your own family!

I think it's more than a little disingenuous to leave the bankrupties out of what is essentially a story about a family's descent into insolvency.

It's amazing that even in this "clarification" Andrews leaves out important facts. His wife also discharged $50,000 ++ in credit card debt in both bankruptcies. Unless this woman's sister is Mrs. MasterCard - sounds like Andrews is still not telling the whole story.

Let me get this straight -- filing bankruptcy to avoid paying back a loan from a sibling is a DEFENSE? What kind of person reasons this way? Also, McArdle's response to Andrews's explanation here reveals Barreiro's many other debts that Andrews fails to address. It's shameful.

Mr. Andrews, I hope you read this. You and your serially bankrupt wife are not everyday people who got caught in a bad situation. This notion -- i.e., the entire premise of your article and your book -- is flat out false. You are financially irresponsible to an extent that is quite uncommon, and your effort to portray yourselves as no different than anyone else (and to parlay this "everyman" them into a publishing payday) is mildly offensive.

I hope the New York times takes action in response to this situation. Your journalism is quite suspect, in my opinion.

Andrews is really shameless. It makes me angry that he is going to get rich off this dishonest book.

Read McCardle's follow-up piece for a response, showing how even Andrew's defense here is misleading and incomplete.

http://meganmcardle.theatlantic.com/archives/2009/05/edmund_andrews_has_responded_t.php

It's weird that you think her financial mess before had nothing to do with your situation with her. Obviously, it had everything to do with it. Why was the Comcast account discharged? Why did you have it in the first place? Why wasn't the sister paid back? Come on. Why didn't you get a second job? Why didn't you get on the lecture circuit? Why didn't you see that Patty was anything but innocent? The comments above bring up relevant questions. And for a man who took out a liar's loan, why didn't you realize that you would be spending more than you were earning? They should send you to prison.

Oh, Puh-leeze. How can anyone accuse you of airbrushing your cringe-inducing story? Because you did. Do you seriously expect us to believe that the only debt she discharged on belly-up no. 2 was the one to her sister (Thanks, Sis! Now sue me!!). What about that Comcast bill? I guess you don't watch TV.

I make about what you make. Never dumped number one for the trophy. And I pay my bills. The interest on my credit card covers your defaults, Mr. economics reporter.

And I'm supposed to feel sorry for you? Boo f***ing Hoo!!
This is almost as bad as Nancy Pelosi. Wanna try again??

Good luck with your book. Maybe you can pay her sister back with the royalties. Or not.

Edmund Andrews:

You may want to up the ante beyond a surrogate response on pbs.org, because your family's tale is getting chewed up and spit out all over this new-fangled Internet thingy. Steve Sailer's having a lot of fun with it and the comments here and at theatlantic.com are pretty refreshing as well.

I hope your second wife repays your loyalty by stepping up to the plate, because y'all are too underwater for this book to bail you out.

This is not entirely schadenfreude. (Okay, it's mostly schadenfreude). Believe me, I'm learning my own terribly expensive lessons at age 45.

It's worth understanding that this story is more complicated than the McArdle blog suggested, but Andrews seems to be out of touch with reality when he says, "It is hard to believe that anybody would accuse me of trying to airbrush a story..."

Andrews shouldn't be at all surprised that omitting the rest of his wife's financial drama looks odd. And it would have been an interesting bit of background: his wife's ex-husband apparently went through a personal financial crash too and this affected his wife unfairly (if we are to believe anything Andrews says about all this).

And Andrews not credible when he says he "wasn't allowed" to use his 401K: one can take an early distribution and pay a penalty (10% federal, plus a state penalty that's 2.5% here in CA), and plenty of people do exactly that to survive and avoid bankruptcy.

The NY Times has had an unfortunate relationship with the truth in some famous instances lately, and the shame is that it harms the credibility of the good reporting the paper does. Andrews should be fired and a smarter financial reporter hired.

This stinks on many levels. Why does the first sentence attempt to define the political leanings of Megan McArdle? It seems like some backhand attempt to discredit her. Why not just get to her point and discuss its validity?

It seems obvious to me that Mr. Andrews did withhold key background information here, and has been caught red-handed. It seems he does feel entitled to sympathy from the public as he fights the evil financial services industry. It also seems that he is full of it and just trying to make a quick buck with his tale of woe.

Ed, never let the facts get in the way of a good story. I sure didn't.

A very dignified response that only furthers my respect. Its also a good thing you responded to PBS rather than McArdle. People like do not deserve to be dignified with the title of journalist, and should not be treated as such.

The vitriol of commentators like
Clark Kent above only makes me more sympathetic. I may just go out and buy Andrews's book just to offend people like him.

1) Andrews writes a book about his family's debt troubles and it 'doesn't occur to him' to mention his wife's two prior bankruptcies? Doesn't even cross his mind; maybe just peak it's head around the curtains? Right.

2) McArdle has responded to Andrews' responses on her blog. Patty wasn't just discharging tax bills in her first filing. She had over $60k in other debts, too. She wasn't just discharging the $29k debt to her sister in her second filing.

3) Yeah, the 'phone was busy' line makes no sense. Email? Text message?

4) I do not feel much sorrow for his wife, Patty, and possibly not for him. Their excessive spending raises the bar for everyone. You have to max out your credit cards just to seem reasonably like anything but a schlub. Cheddar? Feh! It's how the country got into this mess in the first place.

5) Clark Kent's comment reminds me of the brilliant Steve Martin/Chris Parnell SNL skit about about to get out of debt: "Stop Buying Stuff."

I think I smell a Machiavelli. Mr. Andrews has designed a very clever trap to humiliate the woman who ruined his life. Good job, Mr. Andrews.

'Clack Kent' writes above 'No one cares. No one' and may be correct in the social circles he(?) travels within. If true generally, it is the legacy of the right wing, unfeeling, egotists that have been running the country for the past eight years, and the bankers and insurance companies that have driven the 'ship of state' on to a rock.

What a shiny new laptop shown in the segment! These people are soulless.

Mr. Ed,

You're full of it. "Didn't have anything to do with.... yada, yada."

Like two bankruptcies have nothing to do with the kind of mortgage rates you get, not to mention the fact they're simply germane to your tale and you left 'em out because, I guess, they make your wife - and you - look stupid. And now you look stupid anyway.

If you're going to own up, own up. Otherwise, write fiction.

Those of you who are trying to understand the back story, and Ed Andrews' statements here, are well advised to actually GO to McArdle's blog and read what she has said. McArdle has handled this fairly, openly, honestly, and accurately -- which is more than can be said for Andrews.

http://meganmcardle.theatlantic.com/archives/2009/05/edmund_andrews_has_responded_t.php

(And previous entries on the same blog.)

Don't omit glancing through the comments as well; there is not only interesting analysis and commentary, but additional facts dug up from the public domain.

I tried to post a link to McArdle's response earlier. Let's hope it goes through this time.

McCardle's response to Andrews' response is here, and it's worth reading. It's a pretty incisive analysis, and fair:

http://meganmcardle.theatlantic.com/archives/2009/05/edmund_andrews_has_responded_t.php

This response is lame. He wanted to pay off the debt by taking the money out of his 401K but couldn't because it wasn't a hardship. Huh? He could've taken the money out and just paid the penalty and taxes on it, rather than leaving his wife's sister with nothing when she helped his wife when probably no one else would. Also, the library fines--that seems low not to pay the library $80 in fines and include that in a bankruptcy. Also, a $1100 Comcast bill! If you can't pay the bill, the cancel the cable. I wonder if Mr. Andrews benefitted at all from having the Comcast service--therefore shouldn't he be liable for this bill. It's one thing to really hit hurdles in life and get suckered into unwise decisions--it's another thing to deliberately take advantage of the system and work it to their benefit by stiffing service providers and the library they use.

A double bankruptcy not related to future financial problems? Doing the same thing and expecting different results is at best optimistic and at worst psychotic. In fact, as one of the commentators on the Atlantic site points out, the mortgage alone was not the root cause of Mr. Andrew's financial problems, because even if he was able to live rent free, he was still significantly outspending his income.

The Newshour's editorializing here is just as egregious as Ed Andrews failing to disclose a vital component of his story. Megan McArdle is a journalist who has written for the Economist and the Atlantic. Irrespective of her political standings or beliefs, she dug up -- hardly with the strong subjectivity that the Newhour imputes, I might add -- a piece of information that Paul Solman and his team had failed to look into. Solman couldn't be bothered to look into court records or thoroughly investigate his subjects before interviewing him the way that REAL reporters beat down turf.

Once again Mr. Edwards you have proven yourself to be a liar. There is no rule to prevent you from taking money from your 401K. The truth is you didn't want to pay the penalty. You and your wife are deadbeats, plain and simple. Why anyone would buy your book, and for that matter why the NYT would keep you employed is beyond me.

Despite his best efforts and the support of sympathetic PBS interviewers, Mr. Andrews has wound up telling the tale of his family's financial ruin. Whoops--THAT wasn't supposed to happen! To read the story, skip Andrews' self-serving book and go straight to McArdle's blog, Sailer's blog, and the comments at both places.

Meanwhile, keep spinning, Mr. Andrews & enablers. It adds more human interest to an already fascinating account.

IS PBS deliberately white-fonting the links to McArdle?

I'm not so sure that McArdle is completely correct in saying that Andrews is not a typical example of the pathetic hoi polloi caught in the subprime "crisis." Perhaps the two bankruptcies in and of themselves sets Andrews and his wife apart, but the horrible management of their personal finances is (at least from my experience in the mortgage industry as a former lender) very typical of these types of people.

People like Andrews don't appear to fully comprehend how much they are to blame for the mess they find themselves in. I think part of their failure in this regard is due to the fact that they are so quick to allow those evil subprime mortgage lenders to share the blame with them. Maybe if they stop trying to blame (if only partially) the mortgage companies and focus on themselves, they'll realize how much they really are at fault for the current economic downturn in this country.

I'm not judging Andrews or Barreiro, but it seems pretty clear to me that the bankruptcy is relevant.

According to Andrews, in 2004 he and Barreiro borrowed $415,000 to buy a $460,000 house, a house right at the top limit of their ability to pay. Over the next few years, they took money out of the house so that they could spend more money than they were earning on beach houses, fancy cheeses, etc.

Now we know that at the time they made these commitments, Ms. Barrerio was carrying a bunch of debts, including a $30K debt to her own sister. When she and Andrews bought the house, did they have a plan to pay those debts back? If not, then at a minimum, it's relevant as one more thing the lenders should have known but weren't savvy or interested enough to ask.

I believe every word you have stated here, Ed and count on your book, "Busted" being every bit as candid and honest. A lot of people have gotten into similar financial binds in this economy and I think your book will help them in understanding their own predicaments. I plan on buying a copy for a couple of my own family members. Bless you! I hope this publication helps you get out of debt.

So, he's basically saying that between 2007 and now she's had no increase in interest rate on the credit cards in her name due to the drop in her credit score?

He's saying that whatever loan modification that can be worked out will not involve scrutiny of HIS and HER credit scores?

He's also saying that her magical thinking which led to her complicity with these purchases (house, clothes, lattes, etc.), had nothing to do with her (two) bankruptcies? (There's just as much magical thinking involved with not being a part of the income tax filing as there is with not paying back a loan in the tens of thousands of dollars).

Honestly, I do not envy anyone in his situation, regardless of the cause. A drunk is in hell, whether or not it's of his or her own making. But for him to flatly state that the bankruptcy is not a part of the picture is a flat out denial of reality. His concern about saving her the embarrassment is a straw man; he didn't want them to look any more foolish than they already do.

I feel sorry for their kids more than anything.

Just take the money out of the 401K and pay the penalty. Sheesh. You make too many excuses.

Here is the problem with Andrews- he agreed to a mortgage when it was obvious to him that he couldn't make the monthly payment. Not far in the future but from Month One.

This isnt some hypercomplex situation he was lulled into. Yes, he was approved, but only because he intentional went stated income. The math was childishly simply and straightforward- The mortgage payment he was agreeing to was almost all of his take home. This was an inescapable fact that would have occurred to anyone involved in the transaction. He was taking home $2777/mo and the mortgage he agreed to was "over $2500/mo". So if he had lights on in the house and water he was DONE right from the start.

There is no two ways around this- he knew from the start that this wasnt going to work.

For the last 6 months he hasnt paid Citi the $25K he owed them and is just sitting on the money living in the house rent free. The tax payer is going to have to bail out the situation while he pockets the mortgage money. And he isnt even doing maintenance on the place so the bank can sell it and recover some money.

Ed Andrews isnt the face of the mortgage crisis since I refuse to believe that so many Americans are that amoral and irresponsible has he and his wife have been.

I read Ed Andrews original article, and was haunted by it for days. I appreciate his baring this embarrassing event in his life to readers. Let's not be too harsh on his omission of his wive's BK problems. There are a lot of highly compensated flakes around like her ex-husband. Best of luck going forward with their marriage, health, and finances. Advice: write a book.

So Patty's sister had to sue her to get paid back for a loan, and to avoid paying Patty filed bankruptcy? That is pretty cold, to avoid paying your own sister (not to mention irresponsible). How can they justify a $2500 per month mortgage payment while her sister gets nothing? What creeps.

The tone Andrews uses in response is odd, as if, how dare the sister follow them east and demand to be repaid while they wanted to use their money to buy a half million dollar house and rent a beach property. Bankruptcy filings show that the sister was owed $30K. Unless there is something we are missing to this story, Andrews and his wife should have showed some responsibility and repaid her.

Sigh. Just when I thought this sad story can't get any worse.....from the get-go, Ed Andrews attempt to portray his situation and the decisions he made as an example of the subprime crisis smelled to high heaven. I read the BUSTED exceprt; the McArdle revelations, and now this lame-ass Ed response and see glaring evidence of a delusional, middle-aged, over-entitled JERK. For one thing -- and it is interesting that no one seems to be picking up on this -- he tacitly blames his first wife for his cash-strapped condition by whining about how much alimony and child support he has to pay her...I speak from experience: High-earning, middle-aged journalists at Big Name news organizations are NOTORIOUS for this kind of narcissism. Once they hit D.C., especially, they someone kid themselves into thinking that they got "to the top" on their own, and that they no longer can "relate" to the woman who was with them while they struggled up the corporate ladder. Then they embark on a fantasy lifestyle of high-living, and have the nerve to RESENT Wife No. 1 and their own children, because the have to still provide income to them! I won't comment on Ed's second wife: She appears to have bad judgement and possible be a spendthrift, yes. But more than anything, I am disgusted by the flat-out lying and arrogance and self-deluding of Ed Andrews. He has truly given his industry and his company -- the best news org in the world! -- a big, nasty black eye with this dreck. I say, send him to work in the Times' Dakota bureau, where the cost of living is low, and the winters are LOOOOONG...Let him and Patty learn the value of LIFE, not of "status," and material crap!

Dear Mr. Andrews,
Good for you for putting your difficult story out there for all of us to view. You clearly seem sincerely blinded by love. From the NY Times portion of your book, it was apparent that your wife was buying things for you and her children that were beyond both of your means. She seems to have a history of living a child-like existence with regard to money expecting her husband (you or her ex) to bear nearly sole responsiblity for your household's financial well-being. Why would a sane man sign up for that program if not for love? Seems you and your wife have very different value systems. I wish you the best of luck. I think the personal element of your story is actually new ground and far more interesting than yet another analysis of "easy money" and predatory lenders.

Congrats, Ed. You've been named "Beta Male of the Month"