Seems counter-intuitive, but it could be the best money you spend.
People in serious debt resist using bankruptcy to get their financial life in order for many reasons, including
- distraction, and
- cash flow.
Yet, as a means of regaining control of your life and your pocketbook, bankruptcy may be the best move you can make.
Inaction, however unpleasant the current situation, may seem easy. It’s familiar and tolerable. It feels like a safe choice.
You can’t get more hurt by doing nothing, right?
It’s the devil you know, as opposed to the devil you don’t.
But what if the alternative is getting out from under your bill problems and jump starting your financial life? That’s clearly far more attractive than remaining stuck in debt.
Reasons to choose bankruptcy
These ten reasons that filing bankruptcy now may help you make your decision.
- The stress of bills you can’t pay, collection calls, and worry about garnishment can ruin your health.
- Stress leads to fuzzy thinking and bad decisions about money and other issues.
- Living without reserves courts further financial crises.
- No tax is generated by discharging debts in bankruptcy; not so, if you settle debts outside of bankruptcy.
- Debt settlement seldom resolves all debts; if it fails, the money used to settle some debts is wasted.
- Your credit report doesn’t start healing until the debts are paid off or discharged in bankruptcy.
- Minimum payments on credit cards take 20-35 YEARS to pay off.
- Relationships suffer in times of financial distress. Save your marriage, ditch your debts.
- Wait to file until your income improves and the means test may require that you file a repayment plan.
- You aren’t getting any younger: chances are you are poorly prepared for retirement. Every dollar spent making minimum payments is a dollar you’re not saving for retirement.
For most of those buried in debt, neither inaction nor incremental solutions will solve the problem.
Many of the “reasons” that hold people back from the bankruptcy solution are based in myth and misunderstanding.
Think through my list, follow the links to read more, and imagine a life free of dischargeable debts.
See a bankruptcy lawyer and explore how these principals apply to your situation. The financial return on a bankruptcy filing is eye popping.