Today I read an article by Katie Adams entitled, Financial Mistakes That Could Haunt You Forever and it got me thinking. In this unprecedented Economic Depression, we are faced with more difficult decisions about our finances than ever before. Who can we turn to? Who do we trust? I say that now more than ever we need radical independence. Don’t wait for someone else to tell you what you need to do. Be informed and then decide on the right course of action for your own financial well-being.
I hear it every day. “We’re cashing in on our savings and pensions to try to stay afloat.” “We live off our credit cards and now we can’t afford to pay.” These 4 financial mistakes can be fatal in the long run and you may go bankrupt:
* Live beyond your means like yesterday.
* Cashing out a retirement account to pay bills is fatal.
* Fear, Shame and Guilt will paralyze you financially.
* Never, Ever Co-Sign on a Loan, unless you intend to own it and can afford to pay it off!
We’re not in a recession, we’re in a depression. We need to adjust our lifestyle and stop incurring debt and live within our means. Never, Never, and I’ll say it again, Never cash in your savings or retirement account to pay bills because you’ll lose that compound interest, you’ll be penalized for early withdrawals and end up paying taxes. It’s not worth it. In addition, you are more likely to keep a lot of your assets in bankruptcy under exceptions. Lastly, you really shouldn’t panic. Don’t let your fear paralyze you into inaction. The last thing you need is for your paycheck to be garnished by creditors who have sued you before you decide that you need to file for bankruptcy.
I believe that the most important thing to remember is to never sign a co-loan for anyone, unless you have the ability to pay it yourself and intend to have one. This is the reason. When you co-sign for someone else’s debt, you are risking yourself for that debt, if this other person can no longer pay it. If the person you co-sign ends up in bankruptcy, then the lender can pursue you for the debt. You may find yourself thrown under the bus, so to speak, and may end up in bankruptcy as well, if you don’t intend to pay that debt off.
Don’t go broke until you talk to a bankruptcy attorney about your current financial situation. Every situation is unique and you may have options beyond bankruptcy, but you must act now.