Bankruptcy Verses Debt Reduction – No Contest
A report from the Department of Trade & Industry informs us that they expect Bankruptcies to increase by nearly double by the year 2009. This is in a period of assumed general good financial health for the country.
People don’t go into bankruptcy lightly and it is a worrying statistic. It would seem that there are two particular worries here.
The first is that people have taken on debts and credit cards that they are unable to sustain though we shouldn’t assume that they were careless. They may have been unlucky. We make assumptions that our future income will continue in much the way as it is now but that isn’t always the case. Illness, redundancy and divorce are the most commonly cited problems and none of those are things we expect to happen.
The second worrying thought is what might happen if the country were to suffer a downturn. Recession would bring job cuts and many redundancies with the difficult consequences that would bring for many, many people.
The only sensible solution is to bring your debts under control and be prepared for the possibilities that circumstances could change.
Follow a sensible credit card debt reduction plan and reduce your expenses. The money is just pouring down a drain called the credit card companies anyway. Why give it all to them?
Get your credit card and other debts, less mortgage, down to around 10% of your annual salary and if the worst happens you can pay off most of it and survive.
Paying interest on credit cards is stupid. Wouldn’t you rather have that money yourself?
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