What is the Cheaper, Better, Faster Way Out of Debt?

Categories: Debt

I’m glad you asked. I know you’re tired of hearing me brag about how I went through bankruptcy and became a millionaire. I know that no one wants to file bankruptcy, except maybe Trump who’s done it at least 8 times. Here’s what I do know, when you look at your options from a purely business perspective the numbers become clear. Still confused? Here’s a chart that shows your options by the numbers.

From the chart above, we can see that someone who files for a Chapter 13 debt repayment plan in bankruptcy can still repay 100% of what they owe. They can not only save over $25,000.00, they will have saved more than 4 year’s too! Now, imagine the person who has completed their bankruptcy case and continued to save $500.00 during the remainder of time that the person in their own debt repayment plan outside bankruptcy needed to finish his payoff plan. We get the chart below, assuming a 5% interest rate of return on their savings.

Now, it looks enticing, but what about your credit report? After all, you’ve worked so hard to build credit and you’ve heard that bankruptcy ruins your credit, right? For more information on rebuilding credit after bankruptcy, go here. Purely from a numbers standpoint, if you choose to take the road of actual full repayment, you’re essentially saying that your credit score is worth an investment, by you, of $25,000.00 and an extra 4 years. Looking at the time value of money, the same $500.00 saved over the time lost, assuming an interest earned at 5%, that 4 years cost you an additional $28,965.00. You mean to tell me that your credit score is worth more than $50,000.00!?? I bet that guy who filed bankruptcy and paid off his debts in full is glad he went that way, thanked his bankruptcy lawyer with a cup of coffee and now refers his friends to get out of debt faster because they see how happy he is and doesn’t need credit cards anymore because he has an emergency fund. *Protip: Your credit score does nothing more than tell the world how well you manage debt.

Life is nothing more than the sum of every decision/choice you ever made and those decisions that were made for you. You cannot change yesterday, but you can certainly impact your tomorrow by deciding how much time you are willing to invest and how much money you are willing to pay to eliminate your debt once and for all time. Then, what’s your next plan? If 4 years equals $28,000.00, would you reconsider your strategy for getting out of debt? If your friend asked you for advice, would you share this information with them? Now is the time to get into action, make a plan and execute it knowing you’re doing the right thing for your own financial future. There’s power in that. We are here when you are ready. Give us a call today!

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