5 Rules to Live by to Avoid Bankruptcy and Enjoy 100% Financial Security Skip to main content

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5 Rules to Live By to Avoid Bankruptcy and Enjoy 100% Financial Security


Ways to avoid bankruptcy

Ways to protect yourself from financial problems for good

No one starts out their adult life planning to file bankruptcy at some point. As a matter of fact, 99% of our clients never thought they would be in this position and are embarrassed to find themselves so deep in debt that they have to turn to Chapter 7 and Chapter 13 bankruptcy. If you want to be sure that you never end up needing a debt relief solution this serious, here are five rules to live by, if you dare...

#1 Never get sick or have an accident

One of the most common causes of bankruptcy is overwhelming medical expenses. If you're uninsured, under-insured, have high deductibles or incur expenses your policy doesn't cover, you may end up owing big money. If you can still live a productive life while safely ensconced in an anti-bacterial bubble or never drive or leave your home, you may be able to live out your life without getting in an accident or getting sick. Of course, you'll never be able to interact with other people, travel, enjoy recreational activities or live your life in any meaningful way...

#2 Never get married, divorced or have kids

Families are expensive. Weddings cost big money. Setting up a home with someone you want to spend your life with is costly. And if you want to have kids? Forget about it. They are money-consuming machines from conception through college and if you're unlucky enough to have a boomerang kid, they move back in after college and continue running up your bills. And if your marriage begins to come apart at the seams, you should stick with it even if you're miserable because divorce is another leading cause of bankruptcy. It's better financially if you just tough it out, even if you're driving each other crazy...

#3 Never lose your job and always earn a lot of money

This rule is the best way to ensure you never have money problems – just be sure to always earn a lot of cash and never lose your job. 100% employment, 100% of the time, at 100% of your earning capacity is a great defense against bankruptcy. If you can manage to stick by this rule, you should be golden (literally). Just don't let cutbacks, recessions or corporate mergers and downsides affect you and you'll be fine...

#4 Never buy a home or car

While most people dream about buying their starter home or getting their first new car out of college, these people are just asking for trouble by incurring debt and daring to dream the American dream. If you don't ever buy a home, you never risk running behind on mortgage payments, risk the property losing value if the real estate market takes a hit and won't ever face the risk of foreclosure. The same goes for your car. Sticking with the clunker ride you had in college will ensure that you never run late on a new car payment, never get behind with your lender and never run the risk of having your nice new car repossessed. Rent an apartment and ride the bus to avoid this bankruptcy risk...

#5 Never borrow to pay for anything

No matter what, always pay cash. Never have any credit cards, never finance anything and wait on everything you want to own. True, you'll struggle to rent a car or book a flight without a credit card, but you won't have to worry about a financial hiccup leaving you unable to service that debt. If you do want a home, save up hundreds of thousands of dollars so you can pay cash – the same goes for your car - this is the only exception to rule 4 that will allow you to 100% avoid the risk of bankruptcy.

Simply put, if you did follow these five rules, you would statistically eliminate your odds of every having to file bankruptcy to dig yourself out of debt. You would also not live a very enjoyable, meaningful or rich life. You'd never enjoy the comfort of knowing you own a home, have a safe car to drive and the love of family. In essence, what we're saying here is that life is unpredictable and you can't know what will happen, so you can't protect yourself 100% from hiccups that can knock your finances off track. Sometimes life throws curve balls and you end up so deep in debt that you may need to consider chapter 7 or chapter 13 bankruptcy to get a financial fresh start.

If you find yourself struggling financially, being hounded by debt collectors and looking for a permanent debt-relief solution, contact the law offices of John T Orcutt for a free consultation on getting out of debt for good.

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