Posted on Wednesday 11 July 2018
Millions of individuals have filed for bankruptcy since its inception. This may come as a shock to many people who generally view bankruptcy as a state in which low income individuals find themselves. Although bankruptcy occurs when someone is unable to pay their debts, there are a variety of circumstances and decisions which can bring about this unfortunate situation. According to Investopedia , medical expenses, employment loss, excessive spending/misuse of credit cards, marital divorce, unforeseen financial emergencies, and more expenses than revenue are some of the most common factors which have prompted bankruptcy. In the best case scenarios, people would proactively take steps to avoid digging themselves into this hole, but the best scenario is not always the one which ends up playing out. Thankfully, there is still hope and various ways in which people can recover and otherwise break free of the bondage that is bankruptcy.
Many great minds have stated that those who fail to learn from history and past mistakes are doomed to repeat them. This is especially applicable to financial habits and money-related decisions. As a matter of fact, U.S. News recommends people to evaluate their financial choices and pinpoint exactly what led them into bankruptcy. Someone who went bankrupt because of debts should actively seek out additional revenue streams. An individual who experienced bankruptcy due to an unforeseen emergency should be sure to habitually put aside funds in the event of unexpected expenses. Failure to prepare is, in essence, preparation for failure.
So many cases of bankruptcy can be traced back to people living way above their means and constantly swiping credit cards for things that they can't afford. This type of reckless spending is extremely problematic and will certainly kill any potential for forthcoming financial gain and security. Therefore, making payments exclusively with cash or debit not only prevents excessive credit card use, but cash and debit payments furthermore motivate the individual to earn the necessary funds to cover their expenses. Credit cards can be beneficial if the person exercises discipline and self-control. As a matter of fact, many companies have advised individuals who are recovering from bankruptcy to use credit cards. However, a person who still lacks the control to not swipe, swipe, swipe the card at every turn will probably do well to simply make cash or debit payments. After gaining some financial security and acumen, one can then look into applying for a credit card. Also, try to eat at home more vs eating out at local restaurants, etc. If you find you've paid most of your debt back, you can always speed things up with payday loans from My Canada Payday. Just make sure you are able to pay it back and still stick with your financial recovery plan.
Although taking responsibility for one's actions is paramount, so is not falling into the trap of negative self-talk. Bankruptcy is not fun, nor is it an easy state to be in; therefore, many people can eventually begin to feel perpetually discouraged. This feeling will not change bankruptcy, however, excessive self-blame does have the potential to distract from steps that the individual could take as they work to improve their financial health. Remember...getting knocked down happens to all of us, but the decision to stay down is entirely different. There is always room for self-improvement. It all begins with you. In fact, go on a trip (Perhaps get a friend to pay for your travels), clear your head and start again. Try a different career perhaps or something. Just know know that you now have more life experience and there is nothing wrong (Although frustrating) from starting from scratch again.
Authored by Gabrielle Seunagal