by Kelly M. Resnick, Managing Attorney, Resnick Law Offices, Serving the Bay Area
Everywhere we turn advertisements are there persuading us to spend our hard-earned dollars on goods and services we deem essential for our everyday lives. Spending is great for the economy, but sometimes it’s not great for our personal economy.
For those consumers who can not afford to pay cash as we go, credit card companies have been relentless offering credit to everyone and anyone. Readily available credit has made it very easy to live beyond our means.
It is common to have feelings of fear and guilt when we realize we cannot pay for the things we need, or pay back the debt we have incurred. The recent housing crisis coupled with skyrocketing interest rates on credit cards have made maintaining debt payments difficult, and sometimes impossible.
Although these are valid feelings, there are a few things you should keep in mind:
- Bankruptcy is a truly worthy part of our legal system premised on forgiveness, not punishment. It helps keep families together, frees up income and resources for children and prevents homelessness.
- Coincidentally, every successful bankruptcy returns a newly empowered consumer back into the economy. However, this time the consumer is armed with knowledge to avoid financial pitfalls in the future.
- Defaults and bankruptcies are the costs of doing business as a creditor. Even with the largest influx of defaults and bankruptcies in our lifetimes, the large creditors are still going strong. So do not worry–the banks will survive even after you file bankruptcy!
It is true that there are negative effects of filing bankruptcy, and those should not and can not be ignored. But it can also be your lifesaver in times of financial crisis.
Always contemplate both the positives and negatives of filing before making the commitment. With proper guidance, you too can emerge from bankruptcy into a life of financial freedom!
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