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Sunday, February 24, 2008

Avoid Bankruptcy

I am often comforted when I find out that I am in some kind of trouble and I'm not the only one. I mean, no one that I know of really likes to be in trouble but it just seems easier to go through it with others or with the knowledge that you're not alone. So let's talk about debt for a minute.

When I was out of college and didn't have a job I still wanted to buy stuff, so what did I do? I got a credit card. Probably not a smart move at the time but technically I didn't know any better. What was worse is that even after I had come up close to my limit the credit card company allowed me to book a round-trip flight that then pushed me over the edge. Now I had not only the original debt that I could only make minimum payments on, but I also just added overage charges and late fees.

I carried this debt, student loans and a car payment into my marriage. When we were first married though we were more concerned about living happily and enjoying the money that we were making rather than getting clear of our debt. All of that changed when we finally woke up and realized that if we wanted to be able to enjoy more of our money that we should pay off the debts first. Then no one would be able to have any further claim to what should be ours. Several years later we are now almost completely debt free. It has taken a lot of hard work and discipline but we're almost there.

Many people in today's economy are facing potential bankruptcy. Part of it has to do with the fact that today's wage just doesn't go as far as it did many years ago. The other part of it has to do with the fact that many consumers today are flat out paying too much money that they don't have for things that they do not need. Does that make them bad people? No. It simply means that they've gotten in too deep for whatever the reasons are. They need a lesson in debt management and how to recover from it.

For those who have trouble doing it on their own let me suggest working an IVA. This is a legally binding agreement between you and your creditors to help reduce your debt, freeze your interest and allow you to pay off the debt more quickly so that you can get back on your feet.

My wife and I have been fortunate enough to be able to work this out on our own but if you need assistance then don't wait until it's too late. Debt can be hard but bankruptcy has bigger black eyes waiting that you might realize.

Don't wait. Do something today.

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