Perception is not always reality. Do not be fooled by someone driving around in a luxury car and wearing designer clothes. People rarely buy cars in cash, and people cannot always afford the car loan that comes with the car. Just because someone has a nice car does not mean they are comfortably making all their payments each month. The average personal savings rate (the amount of money a person has after expenditures) is around 4%, which is low and for most people, difficult to retire on.
The low savings rate combined with the escalating price of gas, groceries, and education makes it hard to be financially secure. Thus, people who seem to be living a wealthy life may not be as wealthy as you may think.
Further, even people who are considered wealthy, file for bankruptcy. Bankruptcy does not mean you are poor, uneducated or a financial failure. Filing for bankruptcy just means you need a fresh start, financially.
With the way the economy is today, one injury or sickness can throw a financially secure life into financial turmoil.
We all want to pay our bills on time. We have bills because we received a good or service, and in turn we owe the company money as compensation. As a result, when we are unable to pay our bills, we feel remorse, embarrassment and shame.
However, it is important to realize that bankruptcy is not for lazy, irresponsible people who intentionally avoid paying their bills. Bankruptcy was not created as a way to allow debtors to avoid paying their debt. On the contrary, bankruptcy was created to help the honest debtor get back on his or her feet and have a fresh start, which everyone deserves. Bankruptcy allows debtors to have relief from their debt to get back into the stream of commerce.
Still, bankruptcy is not for everyone in every circumstance. But it is an option for those whose debt obligations now exceed their income and assets. If you are on the fence as to whether you should file for bankruptcy, you should contact a bankruptcy attorney to have an initial consultation. The attorney will ask you to bring in several financial documents, and will be able to assess your situation and help you determine the best course of action.