Why You Need to Avoid Being Morally and Financially Bankrupt
Most cases of bankruptcy aren’t caused by reckless spending but by financial hardship. Over 60 percent are lower-income individuals who simply can’t afford to deal with unexpected major expenses such as job loss or medical bills.
There are peaks in petitions during economic downturns. As such, consumers reach for options like Debt Management Plans, Debt Consolidation Loans and Debt Settlement.
However, society in 2022 is suffering from a deeper moral or social bankruptcy. With rates of violence and irrational behavior, TFG discusses.
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Financial Terms to Know – What is bankruptcy?
Bankruptcy is a legal process that you seek to provide relief when you are struggling to repay your debt and live day to day. Depending on the type that’s filed, consumers can wipe out some amount of unsecured debt or enter a repayment plan with better payment terms.
A bankruptcy filing stops debt collection calls, debt lawsuits and wage garnishment. The process can be complicated. Hiring an attorney is advisable. The hope is to see financial improvement within a year.
Types of of bankruptcy
The three most common forms of bankruptcy include Consumer – Chapter 7 and Chapter 13; and Business – Chapter 11.
- Liquidation or Chapter 7 is the fastest and most common form of bankruptcy.
- Wage earners or Chapter 13 restructures debts into a payment plan over three to five years.
- Chapter 11 or “reorganization” is used by corporations and businesses.
Moral Bankruptcy is Draining
Beyond financially bankruptcy, it’s the psychology and moral bankruptcy that really has an impact.
In a world centered around consumption, there is a draining effect on your purpose. We get stuck in never ending loops. While we buy into a lifestyle, only to be indebted to it for even longer. There are too many cooks in this kitchen. In addition, there are too many threads and calendar invites, compared to time decompressing and meditating.
First of all, the college experience is expensive. A pseudo inflated lifestyle that mirrors affluent middle class. The student loans extend way beyond tuition and books. Many end up falling victim to an expensive experience that’s akin to Disney World.
All fluff and payment. After 4-6 years, you end up paying for it for 20-30 years. Furthermore, the pattern repeats itself, post graduation. Maybe it’s time to discuss radical alternatives.
Connecting with us beyond Money:
- Alainta Alcin – Blogger, Travel and Money Enthusiast @alainta_alcin
- Lovely Merdelus – Entrepreneur and Small Business Growth Specialist @lovelymerdelus
- Lawrence Delva-Gonzalez – Federal Auditor, Blogger and Tax Specialist @theneighborhoodfinanceguy
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