Tips Series: Two Great Ways To Avoid Bankruptcy
By Contributor • Sep 16th, 2011 • Category: Bankruptcy
Here is our latest article on Avoid Bankruptcy
Article by David Hoyer
During the course of the past year alone, there has been over a million bankruptcies. And there are many more on the way with the economy showing very little signs of getting better. But, that doesn’t mean that there is nothing that you can do. To avoid bankruptcy, there are a few things that the average person can do.
Number one one your list of resolutions should be to start using your credit card as little as you possible can. A large part of using a credit card is mostly psychological anyway. For example, when most consumers pay for an item by using a credit card, it is as though they are spending Monopoly money. It’s often not until the credit card billing date that they begin to actually think about the items that they have charged.
Unfortunately, when that moment arrives, a large number of consumers do not have the funds to completely pay the balance of the bill. As a result, the credit card balance begins to slowly grow, month after month. It is not too long before it is virtually out of reach based on their income level.
Most consumers in this country have fallen into the habit of using credit cards is as if they are cash. And it is easy to get into that mindset. But, that is not the reality at all. It is helpful to bear in mind that when you use a credit card, what you are actually doing is taking out a loan. In essence, you are spending future income.
The thing is that when the economy is down, there is no guarantee of future money. So, unless you absolutely have to, try not to take these unnecessary loans against your future earnings.
Following that, the next most critical change that you can make in your financial life is to simply cultivate the habit of not spending more money than you bring in. Specifically, if you are seriously thinking of buying that most expensive ‘status’ car, stop and instead purchase a car that fits in with your current salary.
When you go to purchase a home, don’t reflexively look for one in the most ritzy part of the city. instead, purchase one in the nicest neighborhood that you can afford. The tendency among a large segment of the population is to buy things that they really cannot afford. And they typically use a credit card to do this. Simply put, this is a huge financial disaster just waiting to happen. And, with so many people living paycheck to paycheck, a financial disaster is the one thing that they really can not afford to happen.
The biggest reason that many families find themselves filing for bankruptcy is the unwise spending choices that they have made in the past. Sometimes, however, events outside of your control interfere and through no fault of your own, you find yourself facing financial ruin. If you find yourself in this situation, you may have no choice but to file for bankruptcy. But, in most instances, there are things that you can do to help prevent a bankruptcy risk, long before you are hit with these financial problems,.
For additional bankruptcy related articles such as credit card after bankruptcy or chapter 11 bankruptcy lawyer, as well as other financial issues, please visit our website.
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