There is a truism that suggests wealth has more to do with the money you spend, then the money you earn...
Witness people you meet who drive the fancy cars and wear the tailored shirts, appearing wealthy while in reality are one unexpected invoice away from bankruptcy. And then there is the guy who drives the beat-up pickup who has more money than he knows what to do with, and therefore doesn't.
This may be a tale of two extremes. But it's a good illustration of the wide variety of financial strategies and pitfalls observed by Americans in this easy-credit society.
And when it all blows up in your face, there's always bankruptcy.It's a dirty word for a lot of people, and it has more to do with the stigma of bankruptcy, than anything else. In your mind it's a failure, an outward sign to your friends, your community, that you blew it.
But not necessarily: there are many pressures to your finances that you can't predict, let alone control. A health issue that sets you back, or a natural disaster such as a flood or hurricane that leaves you with sometimes huge bills to pay—especially if your insurer waffles on your claim, while in the interim you have to carry on with your life as best you can. And sometimes, that means piling on more debt.
What's more, the recent credit crisis that has seen President Bush poised to sign into law a multi-billion revitalization package in an attempt to rescue the economy and prevent it from sliding into recession, was borne out of too many lenders issuing too much money, and far too easily to borrowers with little means, other than in most cases an over-valued home, to pay it back.
And then there is the statistic that the average American's debt-to-asset ratio is the highest in the country's history. Americans aren't saving. They're buying, and they're buying on credit. Little wonder, given that business and commerce makes it so easy for us to do so.
The bubble, about to burst, is starting to lose air already.And sometimes, bankruptcy is your only recourse.
But take heart. It could be worse. What if that escape hatch wasn't there, and you were required to not only pay ALL your debts back—which you couldn't do in your lifetime—but wound up putting those debts over onto your kids? And their children? Sorry kid, I blew it. Now you have to pay for my bankruptcy debt after I'm gone.
Of course, bankruptcy is no piece of cake. No one, who has gone through it, looks back on the process with any degree of fondness. However, if you have nowhere to turn it's a means to an end, and that end is to wind up with a clean slate and a fresh start.
There are options open to you through Chapter 7 and Chapter 13 bankruptcy, and even though President Bush signed into law an amendment on April 20th, 2005 strengthening the Bankruptcy Act, there are still advantages and possibilities that, hard as they are, would be an improvement over your current situation, which you might view as patently impossible to manage.
The key, if you are facing a brick wall, is to get some qualified help before you find yourself an actual brick in that wall. A qualified bankruptcy professional can assess your situation and, without passing judgment, put you on track to get you out from under the elephant. Make no mistake—it's short-term pain. And don't necessarily expect all your debts to be wiped clean, and hope to get off scott free. In all likelihood there is some payback.
But the consequences of continuing a downward slide into a pit from which you will never emerge, are often what prompt people to realize the inevitable, see the writing on the wall, and make that phone call to a bankruptcy lawyer. "I need some help."
That's all you have to do.
Bankruptcy lawyers can stop wage garnishments, repossessions, foreclosures, bankruptcy lawsuits and creditor harassment. They can evaluate your credit card debts, loans, and mortgages with comprehensive debt and bankruptcy consultation.
Bankruptcy solutions can help you keep your home, your car, and your wages.
And if it makes you feel any better, you wouldn't believe the number of lottery winners who are in the same boat as you.
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And then there are those like Evelyn Adams, who won the New Jersey lottery not once but twice, over two concurrent years in 1985 and 1986, taking home $5.4 million in the process.
Boy, wouldn't THAT be nice?
Not, according to Adams. The money's gone and she lives in a trailer, now. And William "Bud" Post collected a cool $16.2 million in 1988. He now lives on social security and food stamps.
So you see, you have nothing to be ashamed of. You did your best, but life happened. And sometimes when life happens, bankruptcy is the only responsible thing.
It could be the only potential control you have left, the last card you have left to play, in the game that is your financial destiny.