06 Feb Are You Exposed?
Does it do any good to think about why you have debt problems? As a bankruptcy lawyer I have represented clients with every type debt problem imaginable and I think is very worthwhile to reflect about how and why you ended up in a bankruptcy lawyer’s office or even why the word “bankruptcy” may have crossed your mind.
Without getting overly philosophical, I’d like to offer a way to think about debt issues that may help you break whatever patterns exist in your life that put you into debt crisis. I firmly believe that your conscious and subconscious thoughts led you into your debt issues and if you don’t address the underlying thought patterns, nothing is going to change in the long term.
This is the first of a series of articles I am publishing on the Bankruptcy Law Network where I discuss exposure points. From my vantage point, a person ends up filing bankruptcy because that person allowed himself/herself to become excessively exposed to any number of external forces.
If you learn to recognize and control your exposure, then you can change your patterns of behavior and not end up facing financial crises like foreclosure, repossession, wage garnishment, or even stress arising from collection calls or stress just knowing that you don’t have enough money to meet your needs.
I’ll go into more detail in subsequent posts, but here’s the big picture: all of us have situations in our lives where we are exposed. Some of these points of exposure are fully within our control, some are partially within our control and some are mostly out of our control. In some cases, the passage of time can move a point of exposure from being within our control to being outside our control.
Here is how this works in real life.
We all recognize that medical problems and resulting expenses can lead to a debt crisis or even bankruptcy. In my Social Security disability practice I see folks every day who cannot work because of health issues and who find themselves waiting 2 to 3 years just to get in front of a Social Security disability judge for the chance to recover disability benefits and Medicare.
Some of your medical problem exposure can be controlled quickly by writing a check:
- you can purchase health insurance to reduce the cost of immediate medical care
- you can purchase major medical health insurance to cover the cost of catastrophic care
- you can purchase disability insurance to provide a source of income while you can’t work
You can also control your exposure to loss of income and unexpected medical bills in other ways that don’t cost money but are more long term solutions:
- if you smoke, stop smoking since there is no question that cigarette use increases your odds of becoming serious ill. Smoking also negatively impacts your recovery if you do become ill. Smoking is also an expensive habit – you will see positive cash flow by stopping. This is an exposure point totally within your control.
- if you are 20 or more pounds overweight, use the resources available to you (Internet, library) to learn about eating better and exercising more. Carrying around excess weight will lead to heart issues, organ damage, diabetes and any number of other medical problems. Weight loss, while difficult is an exposure point within your control.
- whatever your age, schedule an annual checkup and standard diagnostic tests like colonoscopies, mammograms, PAP smears, prostate exams. Preventative care is especially valuable if certain diseases run in your family. In any case, you reduce your financial exposure by undergoing regular checkups.
If you recognize that a health emergency could leave you insolvent, then consider specific steps about how you can reduce or manage your exposure to this particular risk:
- buy insurance if you can afford it
- if you cannot afford insurance, find a part time job to earn the money to pay the premiums
- if your current job does not offer insurance, look for a job that does
- eliminate unhealthy habits like smoking and poor eating
- make preventative medical care a priority
I hope you can see why I view debt problems as financial exposure problems. Control your exposure and reduce your risk of insolvency.
In the next installments in this series, I will discuss how to recognize your points of exposure and specific steps you can take to reduce, eliminate or manage these points of exposure. We’ll also discuss how bankruptcy can be part of the solution to changing the unhealthy patterns that have left you exposed.
Jonathan Ginsberg, Esq.
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