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For many people, bankruptcy is a way to start over – to get a hold of their life and start from scratch. And while it can be very valuable for some people, for most who file it is just a temporary fix. Sometimes, even the most fiscally responsible person finds themselves with insurmountable debt – medical costs in case of a big emergency or a disabling injury that leaves one without the ability to work can leave an otherwise responsible person with nowhere to turn. But in many cases, the people filing bankruptcy put themselves there by overspending, gathering heaploads of debt along the way that they cannot pay off. And here is why those people should not file for bankruptcy:
They will not have not learned anything by doing so.
Let’s say you live like a movie star for 10 years; buying the best clothes, car, house, appliances, etc all on credit. Eventually that might catch up to you and sometimes it might be so big that you cannot get out from under it. So you file for bankruptcy and it all goes away. Aside from the legal implications of doing so, you have not learned anything at all and you will probably find yourself in the same situation a few years from now, looking for another “easy out”. But this time, it won’t be so easy.
The key to managing your money is just that – learning to actually manage it and to not depend on the kindness of the government to bail you out. By filing bankruptcy, you learn absolutely nothing – and quite honestly, I wish no one who spends themselves into debt was ever granted a bankruptcy filing. It’s partially the reason why so many of us have to pay fees and higher interest on our own cards! Unless it is caused by some unseen emergency of some kind, bankruptcy is definitely not the way to go when you put yourself in that situation willingly.
If you find yourself headed down this path, stop spending immediately. As in, NOW. Start by talking to a financial adviser or a credit counseling agency – do not immediately think to yourself “I will just file for bankruptcy!” as that is not really going to solve anything. You have no idea how to manage your money, and you should start learning right away. Take a class, talk to a friend who seems to have it all together – but this problem is of your own doing, and you should be the responsible one to try to get out from it instead of just filing to make it all go away. That is the only way you are going to become a financially responsible person, by doing it yourself. I have seen more stories than I care to even remember about people who filed bankruptcy only to find themselves right back where they started again a few years later. Don’t let this be you – stop spending, get help, put together a plan of attack and learn about managing your money – do not just immediately look to have the government and the companies you owe money to to forgive your debt. As I mentioned earlier, emergencies are a different matter altogether, but if the cause is just overspending, you owe it to yourself to escape the problem on your own.