AS WE continue to go through turbulent economic times, a lot of people are in a state of panic and anxiety. Thousands of families are overwhelmed with the difficult choices and situations that they face. The questions that I am often asked are: “Will my family’s increasing debt load result in bankruptcy?” “What happens if I lose my home in foreclosure?” Most people are living paycheck to paycheck with zero savings and they barely have enough to put food on the table and keep the lights on.
Personal debt from mortgages, credit cards and other loans has surged and a lot of people have borrowed more than they can pay back. Are you one of these people? Maybe you have been using your credit cards just to survive, hoping that things will turn around soon. But even credit card companies these days are no longer lending money as they used to. They are reducing credit lines and closing inactive accounts to reduce their risks. A few years ago, people used to be able to refinance their mortgage and cash out their home equity every time they needed the extra cash to keep them afloat. But those days are gone and we probably won’t see them again for a long while.
The average household now owes approximately $25,800 in credit cards. Studies show that 65% of all credit card accounts are only paid the minimum required every month. And of course, you know what that means. As long as you are only paying the minimum required on your credit cards, you are guaranteed to remain in debt for a very long time- perhaps for the rest of your life.
So how do you protect yourself and your family in the midst of this financial turmoil? If you are in debt, perhaps you’re feeling as though you have no hope for the future until you find a way to get out of debt and start saving again. Personally, I’ve seen even close friends and relatives go through the agony of losing their homes in foreclosure so I know how you feel. Some people are so paralyzed with fear that they end up doing nothing to change their situation.
One thing you can do is to find a way to reduce or eliminate your debts so that you can have more money available for basic necessities. Experts predict that it may take a while for the economy to get better so this is certainly not a good time to be in debt. Continuing to borrow when you’re already overextended will only lead to financial disaster; it’s only a matter of time before you face the inevitable consequences. Avoid buying anything on credit unless it’s an absolute necessity.
If cash flow is negative, another thing you can do is to learn how to prioritize your debts while finding ways to increase income or reduce expenses. If you can’t pay your bills and you need to choose between paying for your car or your credit cards, who do you pay first? I think it’s fairly obvious that if you lose your car (as in this example), you won’t be able to work and keep your job that pays the bills. Unfortunately, people who are stressed with debt problems can’t even think straight. They lose track of what should matter most to them and they can’t even trust their own judgment.
If you are stressed with debt problems, you may need professional help in finding a solution. For a free consultation, call Toll-Free 1-866-477-7772. We have offices in Pasadena, Cerritos and Valencia.
* * *
None of the information herein is intended to give legal advice for any specific situation. Atty. Ray Bulaon has successfully helped over 4,000 clients in getting out of debt. For a free attorney evaluation of your situation, please call Ray Bulaon Law Offices at TOLL FREE 1-866-477-7772.