14 May How Bankruptcy Helps To Balance Your Budget
Bankruptcy is something that people think is the worst thing that can happen to them. It means that they are broke, and they can’t pay their bills. What they don’t realize is that bankruptcy can be a valuable tool to help balance your budget so that you aren’t broke, and you can pay your bills each month.
When you rely on credit cards to cover things that don’t come up every month like car repairs, house repairs or medical issues, you have to recognize that your budget is not balanced. These things will come up and shouldn’t be a surprise when they do. In fact, there is little anyone can do to avoid them.
Maybe you use credit cards to buy groceries, because your paycheck goes to pay your other bills, like your rent/mortgage, car payment and credit cards or other revolving debt accounts.
Chapter 7 bankruptcy and Chapter 13 bankruptcy can help eliminate or manage medical and credit card debts so that you can use your income to cover your ongoing expenses. It can help you keep your home or car, and get creditors off your back.
- If you couldn’t afford to have something to begin with, why will it be easier to pay back more over time? When you have to borrow to pay for things you can’t afford now, you will pay back more when you consider the interest you will pay, not to mention fees.
If you are using credit to cover your living expenses or “emergencies”, you are spending more than you make to cover the things that occur in your life and your debt payments.
- A balanced budget means that you make at least as much as you spend. If your paycheck covers your monthly bills but you are living paycheck to paycheck, your budget isn’t balanced.
- A well balanced budget means that you make enough to cover your monthly expenses AND put away for the things that don’t come up every month, like car/house repairs, medical/dental needs, clothing, or other things that we don’t use every month.
- A really well balanced budget means that you make more than you spend, are able to put away for those things that don’t come up every month, AND you are able to save for long term goals, like special vacations, college for your children, and your own retirement.
Sometimes bankruptcy can be a tool to help someone get their budget balanced again.
If you aren’t in a position to put away money to cover those things that come up from time to time like car/house repairs, medical/dental needs, clothing, etc. , but you could be if your didn’t have to pay credit cards, medical bills , or other revolving debts, then you might consider speaking to a bankruptcy attorney to see if a Chapter 7 or Chapter 13 bankruptcy could help eliminate those revolving debts, or at least reduce what you have to pay each month.
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