Are you caught up in a vicious debt cycle that feels like it will never end? Have you considered payday loans or already have one? Are you overwhelmed by all the so-called “help” on the internet about getting out of debt? The real secret to getting and staying out of debt requires a permanent change to how you make and spend money. I know it’s not what you wanted to hear, but a shift in perspectives about money is all it takes to succeed and anyone can do it.
In fact, I’ve written a book, 5 Steps to Freedom From Debt, that simplifies all the options people have for getting out of debt. Whether it’s Dave Ramsey’s approach using the Debt Snowball, or filing for Bankruptcy protection; we all have feelings and emotions that affect our financial decisions. When most people think about bankruptcy, they feel shame and embarrassment. In order to avoid shame and embarrassment and still get out of debt, requires repaying ALL the debt at the contracted interest rates for each account. Let’s look at this from a numbers perspective:
- $30,000.00 in unsecured debt at 18% interest with $500.00/mo. payments will take 13 years to pay off; paying a total amount of $78,000.00!
- $30,000.00 can be FULLY paid in FIVE (5) years under a court ordered repayment plan in Chapter 13 Bankruptcy with a $500.00/mo. payments at 0% interest.
- That same $30,000.00 can be discharged in Chapter 7 Bankruptcy with NO Payments. (Bankruptcy costs and Attorney fees vary)
Let’s just focus on the difference between repaying all the debt using the “snowball” method and a bankruptcy repayment plan. The real difference here is the Eight (8) years of payments of $500.00/mo., which totals $48,000.00! So, the secret trick of facing shame and embarrassment will save both time and money.
Imagine if you took the $48,000.00 savings and invested it in a mutual fund that earned 6% interest. After Eight (8) years, that amount would grow to be $63,744.82! The person that filed bankruptcy and fully repaid their debt in Five (5) years, who then took the $500.00 monthly payment, invested in a mutual fund that earned a 6% interest over the next eight years, not only paid off all their debt, but also made $15,744.82. Who does that? Those that take a different perspective to eliminating their debts; that’s who!
