Daily Archives: September 1, 2015

Will You Ever Get Out Of Debt?

Do you feel you will never get out of debt?  overhwelmedBYdebt?

Student loan burden overwhelming?

My fellow bankruptcy lawyers all know of cases, clients,who were so overwhelmed they committed suicide.

Suicide is a permanent solution to a temporary problem.

People do not file bankruptcy until they feel that is the last door on the street.

And bankruptcy is, and should be, a last resort.

I am always blogging about knowing the financial facts of your own situation.

Take your financial inventory, you cannot figure out where to go, or, how to get there, without knowing the starting point.

What is the current state of your finances?

The kiplinger web site recently featured a story: “Ten Reasons You Will Never Get Out Of Debt.”

#1 Don’t know how much you owe. 

I know this happens, folks go to a realtor about buying a house, they go to a financial planner to plan retirement, and, they have no budget.

The realtor/advisor gets the data and says, hey, you can afford zero house payment, you are in the hole now!

Retire?  You aren’t saving now, you are going further in the hole each month,

#2 Making minimum payments

Yeah, these credit cards, once the balance hits “X”, making only the minimum payment gets you a bigger balance at the end of the year.  Even if you STOP using the card.

#3 Mortgage payment too big

This is cropping up again, with a lot of 5 year teaser rate adjustable mortgages re-setting.

And even though the government has been propping up home prices with subsidies like FHA, and artificially low interest rates, in many areas, home prices are not all the way back, and millions of homes are still underwater.

And if your home value did go up, likely your property tax bill went right up with it.

That is, worth less than what is owed on them.

Back in the day, 25% of monthly pay was the maximum mortgage payment lenders would give.

Not no more.

However, it is not a bad personal guideline.

We will look at the rest of the reasons in my next post.

Which you can link here

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