Bankruptcy: A Great Idea For People In Debt, Or A Last Resort? | Money Hints


Many years ago I went a bit crazy with my spending and I amassed quite a lot of loan and credit card debt. My debt spiralled out of control, and I ended up borrowing money from one lender to pay another because I just couldn’t afford to pay all of my bills from my modest salary each month.

As you can imagine, my life descended into chaos, and I was in the middle of financial hell. I never had any spare money to go out and do “nice” things like having a meal in a restaurant or having a few beers with my buddies on a night out.


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Pretty soon, I started falling behind on my payment obligations and had reminder letters, followed by letters threatening court action against me by solicitors. It was at this point that I had realised things were pretty dire indeed.

A light at the end of the tunnel

Fortunately I was able to turn my life around and today I am enjoying the fact that I can go out, and buy stuff using my own cash rather than “borrowed” money from credit cards and loans.

It has taken me several years to get to this point, and I am very grateful that I had the support of family members and debt charities.

They have helped me to arrange a payment plan for all of my debts, something that has allowed me to have some spare money each month to pay for things other than bills.

I won’t lie to you; it was a very long and difficult journey to reach this point, and it is an experience that I would not want to wish on anyone! As you are reading this blog post right now, I am going to assume that you are probably in a similarly dark place with your debts at the moment.

How to get out of financial hell

Whilst it’s not a place that anyone wishes to be in, the good news is that there is help and support available to get you out of there! The course of action you take in order to resolve your debt crisis depends on your current situation and what you are prepared to do about it.

The main options available to you are as follows:

  • Debt management plans – most people that have debt problems were careless with their money, or they lost their jobs and could not afford to meet payment obligations with their lenders. A debt management plan is a way that can help debtors to pay off their debts but at a reduce and more-affordable rate;
  • Bankruptcy – this is usually a last-resort option, but is often the best solution for people that have untenable financial issues. For example, you might have six-figure debt (or worse) and are only earning a small amount of money from home in comparison, making it impossible to repay all of your debts in a timely fashion.

If you are considering bankruptcy, I highly recommend that you discuss your financial crisis in great detail with a professional lawyer, as bankruptcy can severely impact your ability to get credit in the near future.

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