There’s a reason why so many bankruptcy attorneys are finding themselves busy (and employed!) despite an otherwise shaky economy. Americans, on a whole, seem to have a problem grasping the notion of staying out of debt (perhaps they took a few too many cues from the government). Stephen Graves of the Graves Law Firm is a Texas-based bankruptcy attorney who has been in the industry for several decades, and he thinks that most cases of bankruptcy seem to contain the same few common denominators.
According to Graves (and most other financial experts for that matter), people have a tendency to overspend and overextend themselves financially when presented with the opportunity to do so. After all, why would a person want to settle for a run-of-the-mill home when a mortgage company is willing to lend him enough money to purchase a miniature mansion? And what’s to stop a fashion-minded fanatic from treating herself to as many designer handbags as can fit in her closet when her credit card company is happy to keep raising her credit limit?
Then again, as easy as it is to blame the big bad lenders for dangling the proverbial carrot and waiting for the hungry to bite, people do need to take some responsibility for their actions on the financial front. And although certain types of debt, such as medical debt, student loans, and job loss debt can’t necessarily be avoided, there are plenty of scenarios in which bankruptcy comes as the result of utter greediness and extremely poor planning.
So what can a person do to avoid winding up in debt? In Graves’ experience, the most common causes of debt in the United States are divorce, illness, job loss, and overspending on homes and credit card purchases. While the first three factors can’t necessarily be helped, it is certainly possible for people on a whole to pledge to only spend within their means, even if it involves living in smaller homes, driving average-looking cars, and passing on those expensive clothing items in favor of department store discounts. Additionally, those looking to stay out of debt should make a point of limiting themselves to a couple of credit cards at most – specifically, ones whose credit limits seem compatible with their actual earnings. After all, if a person makes $30,000 a year, then he should not necessarily be walking around with a $40,000 credit limit tucked away inside his wallet. And while credit card companies will be happy to keep collecting those high interest payments while counting on the fact that most people will do what it takes to avoid bankruptcy, those very penalties end up sending a fair percentage of folks into bankruptcy in the first place. In fact, one would think that the credit card industry on a whole might get a bit more conservative given the events of the past number of years. But based on recent statistics, that does not appear to be happening (though thankfully, the real estate industry has raised its standards as far as creditworthiness is concerned).
If you happen to have wracked up a significant amount of debt and are looking for a way out, then contact an experienced bankruptcy attorney to evaluate your circumstances and advise you on your options. Remember, the thing about debt is that ignoring it won’t make it go away, nor will it better your financial situation better on a whole. And given the percentage of Americans who find themselves in serious debt each year, you can perhaps take comfort in the fact that while you might have gotten in way over your head, in the grand scheme of the entire country, you’re certainly not alone.
This article is for informational purposes only. You should not rely on this article as a legal opinion on any specific facts or circumstances, and you should not act upon this information without seeking professional counsel. Publication of this article and your receipt of this article does not create an attorney-client relationship.
