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To File or Not to File

Updated on July 18, 2015

To File or Not to File

Just about everyone in the United States has suffered, or is currently suffering some sort of setback due to financial obligations. I, for one, have been engulfed in credit card debt. My debt is currently under ten thousand dollars, but there are millions of Americans who have at least 30 to 40 thousand dollars or more in credit card debt. What to do? Usually, the "easier" route is to file for bankruptcy. Have I looked into this? Sure. Am I ready to face the consequences? No.

Bankruptcy stays on your record for at least 7 years, if not longer, sometimes up to 10 years. If you are thinking about getting a home, apartment, or car within that period, don't file! It is extremely difficult to obtain those 3 things once you file. And in some cases, some potential employers might not hire you if you have a bankruptcy on your record. Of course this is only when they do a credit check, but it seems more and more companies are going that route.

Sure in a couple years you will be receiving more credit card offers in the mail after you file, but isn't that why you got into this mess to begin with? Don't get me wrong, I am not judging anyone who is in debt, or who has already filed. I understand in extreme cases, there is just absolutely no way out of debt. Take for instance credit card consolidation loans. Let's be real, no one can obtain these when you're in debt and have a poor credit score. And once you do, you're interest rate is higher than your APRs. It always feels like once you are in debt, there never seems to be a way out. Sometimes I feel the system is broken. Once a person comes across a bad life situation, and things just happen to crumble financially, credit card companies offer you cards with higher interest rates, and even annual fees. How does one expect to even get out of debt when it feels like these companies are pretty much holding you under water. It's a vicious cycle. One that must be broken.

I, for one, decided to visit a website called readyforzero.com. There, you can input all your debt, and it gives you an idea of when you will have it all paid off if you follow their payment structures. Usually, the higher APR on a card, the more you would pay on it to get rid of it quicker. Sure this sounds difficult, and extremely hard at first, which it is, but if you can exhibit self-control and not spend, in fact, cut down on spending, getting out of debt is closer than you can imagine.

The first year is the worst year. You will have to cut corners big time. No one wants to live this way, but think about it this way, your options are A. Get out of debt in less time than you can imagine by cutting spending and try to make higher payments on cards rather than the minimum, B. Keep on how you been doing by paying minimum payments and also pay an exuberant amount of interest fees over the next decade or so, or C. File for Bankruptcy, get rid of all your debt, but have the stigma of bankruptcy on your credit reports for the next 7-10 years. I would opt for option A. It doesn't hurt to go on readyforzero.com just to get an idea of what is possible. Even if you can't afford the higher payments, try to do half. The hardest part is cutting down your spending. This means not going out to eat as much, not paying for friends, holding off on that new dress or outfit you saw in the magazine, not going to movies, and not going to shows, concerts, theater, etc. Now I know this is the worst part, but consider alternative options. Instead of the movies, rent a Netflix or Redbox movie. Instead of 8-10 dollars a ticket, you are spending more like 1 to 2 dollars. That would be a huge savings over time. Instead of going out to eat and splurging $50 dollars on a night out, cook in your own kitchen. It is much cheaper to shop for fresh ingredients and cook in your own kitchen rather than have someone do it for you, don't forget you wouldn't only be paying for the meal, you'd be paying for gas or a cab to get there, and the tip for the server. I've heard that people say it's actually more expensive to buy fresh ingredients and cook, than go out. Now if you are going to McDonald's and buying happy meals, sure it's cheaper, but it would also keep you still in debt. How? Because your frame of mind wouldn't change. The more and more you do for yourself, the more and more it becomes easier to get out of debt. Remember, the hardest part is the first year. I would rather have a difficult year, than a lifetime of hardship.

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