Saturday, January 30, 2010
Why I don't believe in bankruptcy
Although this might be an unpopular opinion, I think that most of the time, bankruptcy is not an option. Let me explain why.
I've declared bk. In 2001, when I was 26. I think I was $22K in debt and was so stressed and disheartened by the payments that I thought I would never dig out. Fast forward to a little over a year ago--September 2008. I was back to $55K in debt and feeling much the same as I did in 2001. I was barely making my minimum payments and it felt like I'd never get out. So like I often do when I feel like I don't know enough to handle a situation properly, I started reading.
I read Jerold Mundis' How to Get Out of Debt. I reread Suze Orman and started watching her show every Saturday (or Tivoing it). I read Dave Ramsey's Total Money Makeover book.
And since then I've paid off 22% of my debt. I'm down to $41K and will be completely free of consumer debt (cc's and loans) by the middle of 2012.
(I'd be further along but I continued using my cards for the first 8 months--doh!)
First step to success: cutting up your cards. This is the one that basically changed my ways. Well, I actually froze them in a bag of peas in the freezer, but same thing--I'm not defrosting them for anything.
Second for people who feel like minimums are killing you: call your credit card companies to explain your hardship and ask them for help. They may laugh at you. But they also might offer help and actually bring you some relief.
If you have debt, keep in mind that I don't know how you got here. I got here by using the ostrich method of managing my finances--head permanently buried in the sand while I handed over my credit card to pay for everything from new shoes to gasoline.
But regardless of your path: whether it was using credit to spend more money than you made or something awful like medical expenses, you still spent money that you're responsible for. And believe me, when I say I mean that with love. Because I know how you feel. I have felt under the crushing weight of debt most of my life. But there is a way out and there are people who can help you get started and stay motivated.
For me, bankruptcy wasn't a relief. It was in the short-term, but because I got into debt by overspending, I returned to my habits after the dust cleared. It wasn't a long-term fix.
I've declared bk. In 2001, when I was 26. I think I was $22K in debt and was so stressed and disheartened by the payments that I thought I would never dig out. Fast forward to a little over a year ago--September 2008. I was back to $55K in debt and feeling much the same as I did in 2001. I was barely making my minimum payments and it felt like I'd never get out. So like I often do when I feel like I don't know enough to handle a situation properly, I started reading.
I read Jerold Mundis' How to Get Out of Debt. I reread Suze Orman and started watching her show every Saturday (or Tivoing it). I read Dave Ramsey's Total Money Makeover book.
And since then I've paid off 22% of my debt. I'm down to $41K and will be completely free of consumer debt (cc's and loans) by the middle of 2012.
(I'd be further along but I continued using my cards for the first 8 months--doh!)
Second for people who feel like minimums are killing you: call your credit card companies to explain your hardship and ask them for help. They may laugh at you. But they also might offer help and actually bring you some relief.
If you have debt, keep in mind that I don't know how you got here. I got here by using the ostrich method of managing my finances--head permanently buried in the sand while I handed over my credit card to pay for everything from new shoes to gasoline.
But regardless of your path: whether it was using credit to spend more money than you made or something awful like medical expenses, you still spent money that you're responsible for. And believe me, when I say I mean that with love. Because I know how you feel. I have felt under the crushing weight of debt most of my life. But there is a way out and there are people who can help you get started and stay motivated.
For me, bankruptcy wasn't a relief. It was in the short-term, but because I got into debt by overspending, I returned to my habits after the dust cleared. It wasn't a long-term fix.
// posted by Rossie @ 5:30 AM 
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