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The Debt Trap
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Unfortunately, a great many consumers fall into what I call the “Debt Trap”. We are bombarded daily with advertisements on TV, radio, billboards and store displays all designed to stimulate our desire to spend. Conversely, there is no stimulation to save.
From first the time we buy a car on credit, we are conditioned to make monthly payments. If we want more stuff, then we take on more monthly payments. This makes us wage-slaves—working to make just enough to cover our debts—leaving little or nothing left for monthly savings. This cycle of debt is the Debt Trap.
Bankruptcy is needed when the Debt Trap is sprung by an unexpected loss of income, an illness, unemployment, disability or divorce. Your monthly obligations remain the same (and often balloon as the credit card companies raise their rates due to missed payments). Then, your savings is too meager to weather the storm and is quickly exhausted. Often, out of desperation, people use their retirement savings to meet their obligations (A VERY BAD IDEA)... then the government could levie additional taxes for cashing in your retirement and for additional income... sometimes a 1099 is sent when a debt is written off by a creditor. Yikes... it's a snowball rolling down a hill... out of control!
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How to Recover
How do you get out and stay out of the Debt Trap? Bankruptcy can get you out of the Debt Trap by discharging most, if not all, of your debts. Staying out of the Debt Trap requires a change in thinking and a willingness to live on less than you make (if possible, substantially less than your earnings.) After bankruptcy, you can stay out of debt by saving and investing what was formerly going to monthly payments — then that money will go to YOU rather than your creditors! You can change your family's entire financial outlook. Avoiding debt allows you to save and be ready for the storms of life.
This is how we help you at the Hixson law firm—we give you a new start combined with a sound plan for the future. Call us today to get your free consultation!
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