As foreclosures become more and more frequent around the country, everyone worries about home values dropping. Meanwhile, insurance executives, I’ve been reading, are worried about matches dropping – on gasoline-soaked rags inside closets! That’s because the insurance industry fears more homeowners will see arson as a way out of financial problems. (Can’t make the mortgage payment? Try burning down the house and then collecting from the insurance company!)

Fortune Magazine interviewed spokespeople from Allstate and State Farm; both noted that arsons have already increased among homes in foreclosure. The California Insurance Division reports that the number of questionable residential fires in 2007 was up 76% from the prior year. Needless to say, law enforcement agencies are on alert for arson. Penalties in many states are being increased.

I know that Indiana has its share of people committing desperate crimes. In fact, one of the cases cited in the Fortune article involved a woman in Indiana who offered her neighbor money to help her burn down her house and make it look like a botched rape attempt. The horrified neighbor reported this unfortunate woman to the police, and the crime was never committed.

I must confess that it’s very upsetting for me, as a bankruptcy attorney in Indiana, to read these stories. First of all, as a lawyer I know that arson is a felony, with very, very severe penalties, including substantial fines and even years in prison. All of us pay higher taxes to support additional law enforcement and fire departments to enforce the law. But most important, when any fire is set, people’s lives are placed in severe danger. Fire destroys people. It destroys dreams. To think that a homeowner would turn to such extreme – and illegal – means, when the State of Indiana has provided a system of bankruptcy law to help people safely rebuild their lives – it brings me almost to tears.

Remember – Foreclosure is not the end of the world! Fire can be. It’s bankruptcy, not arson, that can provide a fresh, within-the-law, financial start!