Bankrupt

Americans are in a Credit Crisis as Millions of Individuals Go Bankrupt

When it comes to using credit and managing debt, many people don't have a clue. It's so bad that the numbers of those going bankrupt each year is astounding. Some financial experts attribute this to the fact that consumers and business people alike wanted to file before tougher laws went into effect. The Federal Trade Commission (FTC) issued new rules in late 2005. Although there was over a thirty percent increase between 2004 and 2005, if you look at previous numbers, there has been a definite upward trend since the 1990s. Somehow we lost the basic art of paying cash for purchases, as well as evaluating whether or not what we're buying is a need or a want.

Lenders in general and credit card companies in particular are enjoying the fruits of our lack of good sense. They make billions of dollars each year in interest payments, late fees, over-limit fees, and other often nebulous collections. And it isn't just adults falling into huge debt; many young people go bankrupt before they even finish their first year of college. Legally, no one should use a credit card until they're at least eighteen years old, yet thousands are issued to kids as young as thirteen. Unfortunately, most of them aren't educated in the sensible way to use them, and they have a wonderful time buying all sorts of fun things. It isn't always the big purchases that get them in trouble; often it's an accumulation of small items.

It's actually important to build good credit. Most people want to own their own homes at some point, and housing prices are skyrocketing in many markets across the country. A solid credit history earns the most favorable mortgage terms, including the lowest available interest rate. Credit card companies and our communal consciousness promote instant gratification, rather than sensible buying. Want rather than need is the driving force behind too many purchases. It's no wonder over a million consumers go bankrupt each year. It's so commonplace in fact, that it isn't even a big deal anymore. Bankruptcy used to bring feelings of shame and embarrassment. Those filing nowadays too often just shrug their shoulders and start collecting credit cards all over again. It's easy to get new cards; you just have to pay more interest. Too few people know how to compute how much it actually costs.

In order to break the cycle of outlandish spending followed by going bankrupt, we need to learn and pass on habits of saving money, charging only what we can pay off in a billing cycle, and realize that we don't need everything we want.

To find a debt consolidation specialist who can aid you in developing a personal debt solution which hopefully helps you avoid going bankrupt, please submit the completed form found on this page.

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