About 7 years ago, Americans as a whole stopped digging themselves into debt. However, according to a Reuters report, Americans are beginning to borrow more again.
“US household debt rose in the latest quarter by the most since before the recession, a sign that Americans may be nearing the end of a multi-year belt-tightening trend,” the Reuters report said according to stats from the Federal Reserve Bank of New York.
With the housing market showing some life, homeowners are beginning to see equity in their homes. With that equity noticed, some homeowners feel it’s okay to start borrowing more money, or “digging.”
One of two things can happen as a result.
1. The homeowner is getting older and has seen what can happen when he or she digs and gets in over his or her head, remembering how stressed and worried he or she was when the recession hit. Because of this, he or she stops digging. In other words, lives his or her life within his or her means and not spending money that’s not available.
2. He or she begins to dig again because he or she didn’t learn a lesson the first time.
Just because you’re seeing equity in your home and feel comfortable borrowing again doesn’t mean you should. Just because today things are up doesn’t mean that tomorrow things won’t be down. Instead of owing money if/when things go down, wouldn’t you rather have money saved up to be able to handle it?
We shouldn’t be comfortable with increasing debt – it really can take control of your life.
As a Memphis bankruptcy attorney, I’ve seen individuals in my office sitting in front of me telling me their story of how they had a great job, nice things and were living a successful life. However, an unexpected medical emergency or a loss of job wrecked their perfect life and they weren’t ready to handle it financially. Why? Because they borrowed too much money and didn’t have enough saved up. They quickly fell into more and more debt, becoming slaves to it.
Maybe this is you. Maybe you’re feeling enslaved to debt right now. However, here in the US, we don’t have to feel that way because we’re entitled to a second chance through a bankruptcy.
By filing for bankruptcy, you can either discharge all of your debts through a Chapter 7 or lump your debts into an affordable 3-5 year repayment plan through a Chapter 13. After your bankruptcy is complete, you have a fresh financial start and a great opportunity to change your lifestyle and do things different financially.
We can help you make that lifestyle transition by offering you access to a great 14-week program called “7 Steps to a 720.” This program, free to our clients, will teach you:
- how to rebuild your credit the right way
- why most credit scores are wrong
- which credit cards actually hurt your credit score
- how to stop lenders that report the wrong information
- how to re-establish your credit after a bankruptcy, foreclosure or short sale
Speaking with bankruptcy lawyers Memphis, TN has to offer will help to ensure that you have access to the legal support you may require during an overwhelming life transition.
If you’re struggling with debt and have any questions, or you’re considering filing for bankruptcy, give us a call at (901) 327-2100 or fill out the “Get in Touch” form below. One of our experienced Memphis bankruptcy attorneys will be more than happy to speak with you about your situation and lay out the best options for you, free of charge.
If you’re someone who’s not enslaved by debt and want to avoid it, don’t dig a hole. Borrowing money you can’t pay back is a set up for a life controlled by debt. You don’t want that for yourself. Spend and borrow wisely, folks.