You Cannot Borrow Your Way Out of Debt
By Kurt O'Keefe, Attorney at Law on Aug 8, 2007 in General Bankruptcy Information
Credit Card borrowing statistics in from the Fed, May revised up to 7.9% increase in borrowing, June checking in at a 6.5% increase.
These numbers include mortgage and loan debt, but are being interpreted as consumers using more credit cards because they can no longer borrow against their homes.
Other government statistics show consumer spending up only 1.3% last quarter, down from 3.7%.
This can only mean consumers are borrowing to pay basic living expenses. Not a good idea.
I find most of my bankruptcy clients, especially self-employed, are eternally optimistic. They borrow today, because business will get better tomorrow.
Of course, the lenders encourage this, with commercials musically illustrating how you can shop your way out of a bad mood.
It is a bad idea to borrow against your house to pay credit card, or other debt. Usually, this turns unsecured debt into debt that you must pay to keep your house even if you file a bankruptcy.
Borrowing to pay living expenses indicates living beyond your means. This cannot continue indefinitely.
I call it, ostrich head in the sand, denial. The only way to make the best of your life is to face the facts, whatever they are.
If you are the situation of borrowing to buy food, or make house payments, consult a bankruptcy attorney about your options. Bankruptcy is, and should be, a last resort. But it usually makes more sense than trying to borrow your way out of debt.
If you liked that post, then try these...
Should You Feel Guilty about Filing for Bankruptcy? by Stephen Otto, Pennsylvania Bankruptcy Attorney
What if an Audit of My Chapter 7 Case Finds a Material Misstatement? by Peter Orville, Attorney at Law
What Can I Keep In a Bankruptcy? by Brett Weiss, Maryland Bankruptcy Attorney
You must be logged in to post a comment.