CBS news website says the parent company of the National Enquirer, among other publications, will file Chapter 11 Bankruptcy.
How did that happen?
The Associated Press story, (which also has the photo I used right here)
says too much debt from borrowing when times were good.
Why do people and businesses do that?
Sometimes it is good planning, sometimes it is not.
Ford borrowed billions, pledging all of its assets, before this recession started.
GM and Chrysler did not.
Which ended up in?
Most of us should not be borrowing when times are good.
Yeah, it is easier, interest rates are low.
My father always told me, banks love to lend money to people who do not need it.
But, don’t forget the planning part: how do you plan to pay back this debt when times are not so good?
Many of us got with teaser rate credit cards, 2.9, 1.9 or even zero percent on cash balance transfers.
Then, the music stopped playing.
The credit card companies, wanting to stay out of Chapter 11 themselves, constricted
the amount of credit by hundreds of billions of dollars, lowering credit limits unilaterally.
Oh, yeah, and rates went up to 15%, 23%, or higher.
So consumers get hit with the double whammy, higher monthly payments, or the same monthly payment, only that is not enough to pay down the debt, and, loss of income with which to make those payments.
Let’s turn back the clock.
NEVER assume the good times will last forever.
Times are good, we have not borrowed that money yet, whether on credit card cash advances or home equity loans.
Instead of borrowing, we tightened our belts and saved.
Maybe now we have a home with equity in it, or at least not tens or hundreds of thousands of dollars underwater.
And we are not paying hundreds of dollars a month in interest on credit card debt.
So we can weather the storm of a lost job, or cut back hours, without having to file bankruptcy ourselves.
Well, 20/20 hindsight is available to us all.
If you are stuck with too much debt, and not enough income, bankruptcy might be your best option.
Watch the video and fill out the budget form, and I will go over it with you, for free.
National Enquirer To File Bankruptcy?