I couldn't believe what I was reading. In fact, I was shocked. A popular personal finance expert wrote this advice on the subject of bankruptcy: "If you cannot get out of your financial mess in two years, you should consider filing for personal bankruptcy."

I can't tell you how much I disagree with that advice, but I can give you the top three reasons:


1. Two years is not long enough. Any challenging debt situation will require at least two years to fix. You cannot stop living until you get out of debt. You should not, as some experts advise, forgo saving so you can send every available nickel to your credit card company. That is foolish because you are making no allowances for stuff that's sure to happen while you're getting out of debt, like needing new tires, or replacing a busted water heater. You're going to face at least a few Christmas seasons while you're getting out of debt. If you are not setting money aside for that through the year, you're setting yourself up to fail miserably. Getting out of debt needs to be a methodical, slow and steady process. Setting a two-year time limit nearly guarantees that bankruptcy will be the only option.

2. Bankruptcy may be legal, but it's not moral. Whether you got yourself into a terrible loan or not, you did sign the papers. No one held a gun to your head. Now, you have a moral responsibility to repay, even if your creditor is filthy rich and wouldn't miss your measly repayment. Had I filed for bankruptcy to get a "fresh start" by stiffing our creditors, I am nearly certain I would not have learned the lessons I needed to learn.

3. It's too easy. Once you've filed for bankruptcy, your chances of doing it again increase dramatically. Statistics say you have a 50 percent greater chance of filing again in seven years. I've been through terribly deep financial trouble. I know how difficult it is to make the long journey back. The most important thing that happens is the change of attitude, breaking old habits and forcing new ones.

Since federal bankruptcy laws were changed several years ago, filing for personal bankruptcy is not as easy as it once was. If you have an income and a home, the courts may not allow a Chapter 7 filing. Instead, the courts will set up a repayment plan under a Chapter 13 filing.

I have a better idea. Commit to getting out of debt by doing the right thing. Create your Rapid Debt-Repayment Plan. It's an option that is ethical. It's logical, but best of all, it's a plan that works!

You can check out a demo of how this plan works when you click on "RDRP Calculator Demo" at DebtProofLiving.com.

Have a comment or feedback on the subject of bankruptcy? You can do that at my blog, at MoneyRulesDebtStinks.com.


April 26, 2010


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