Instant - I want it NOW!

We have a tendency to want (and expect) things to happen instantly. And we want those instant solutions to be without any negative consequences.

Frequently, I’ll meet with clients who will sit down and tell me (a) they do not want to file for bankruptcy and (b) they want to get out of debt instantly.

Here’s the thing. Despite what the lotto commercials say, for most people, getting out of debt and accumulating savings requires one simple formula:

Spend less than you earn.

But, here’s the problem - if you are like most of my clients, after all the bills are paid each month, you are at a negative number requiring you to use credit cards to make up the difference. Next month, you are even further behind and the cycle continues.

There comes a point where you’ve accumulated so much debt that no amount of belt tightening, reduction in expenses and instant ramen will get you out of debt. Bankruptcy laws exists so that you won’t be enslaved to your debt forever and gives you a chance to live a productive, successful, debt-free life.

Is bankruptcy an instant solution? No. But it’s probably as close to an instant solution as one can find with Chapter 7 taking about 3 - 4 months and Chapter 13 taking 3 - 5 years.

By the way, if your debt free strategy involves winning the lotto, you might want to read this article from Freakonomics.

Image credit: Leo Reynolds

Tagged as: Chapter 13, chapter 7, credit cards