Bankruptcy Cannot Be an Option at a Time of Limited Borrowing

Bankruptcy is the only financial fault that the United States constitution exclusively goes into detail to describe and regulate; primarily by granting congress the ability to control national bankruptcy law. Compared to the overall theme of rugged individuality determined by the framers in their creation of a national government, our rules regarding bankruptcy seem particularly soft. This leads many to believe that bankruptcy can act as a sort of nationalized system of financial insurance. This misnomer couldn’t be farther from the frugal truth.


By declaring bankruptcy, you either re-locate debts or have them wiped away forever. In exchange, you are barred from taking out most lines of credit and are further limited in your borrowing options for years. At a time when borrowing is limited and many of us find ourselves in financial holes, it might seem like an opportune time to declare bankruptcy. But by doing so, you risk pigeon-holing yourself when alternative paths exist. By completely barring yourself from borrowing, you risk further personal financial destruction at a time when responsible borrowing is the key to long-term economic stability.

But the thing about bankruptcy is that it’s almost impossible for the possibility of having to declare it to sneak up on you. Typically, you see it coming months in advance. Therefore you should always consider the following debt management solutions and methods of establishing easy-to-manage payments before filing for bankruptcy:
1) Refinance
Getting lower monthly payments may be the easiest and only solution you need to choose when faced with the possibility of bankruptcy. Home refinancing and auto refinancing can reduce monthly bills by possibly hundreds if applied in unison.
2) Re-evaluate Expenses
It sounds so simple many people forget to do it because they think it won’t amount to squat. But the truth is just by choosing a slower monthly Internet connection or picking only one of several monthly TV entertainment options, you can see your cost of living decrease significantly.
3) Resist as Much as Possible

People forget that by declaring bankruptcy you virtually doom yourself to a longtime of coupon-cutting anyway. The time to commit to a Spartan lifestyle before bankruptcy becomes absolutely necessary, not afterward. Switch to Goodwill instead of Target, and Aldi instead of the supermarket. You might as well if you’re considering causing yourself to have to make the switches anyway.

Despite constitutional provisions that suggest the contrary, bankruptcy cannot be considered a way of life for the American people. It keeps you from establishing the responsible borrowing history required to maintain the good credit standing measure that’s been raised during these touch economic times. It also exists as an emergency choice, not a way to sleep easy on top of a pile of bills. Start by living responsibly before you attempt bankruptcy as the benefits of bankruptcy are few and far between.