Filing Bankruptcy Can Make You Wealthy. Here's How!

Edrie Pfeiffer
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Edrie Pfeiffer, Bankruptcy & Divorce Attorney

It sounds like an absurd statement that you can actually become wealthy by filing bankruptcy. Bankruptcy has a stigma of symbolizing poverty: you've reached the end of your financial rope and you are scraping the bottom of the barrel. How could anything good come from that? You badly need a fresh start, but can barely afford your bills, much less an attorney. While filing a bankruptcy will not increase your odds of winning the lottery, it can absolutely put you in a better position to accumulate wealth, or at least financial security. Attorney Pfeiffer breaks down the path to success through bankruptcy:

Let's break it down like this. If you are currently using a huge portion of your monthly income to make the payments on credit cards, medical debts, and/or  personal loans (and not really making a dent in the balances), a bankruptcy may be the best solution. Why? Because it will allow you to make real, achievable plans for your financial future. I always give clients who come to me about filing a bankruptcy this advice: If you can afford to pay off your credit card debts, personal loans, and other bills within a 3 year period (without using the money that you need to support yourself and your family) then you should take that path. BUT, if you cannot pay off these bills within 3 years, then bankruptcy may be the right solution for you to start fresh.

Think about it... if you are currently paying over $500 a month on credit card bills, personal loans and other debts, then you are paying over $6,000 a year with little to show for it! Even worse, you may be in the hamster wheel of having to use your credit cards to pay for your necessary living expenses, because you have to use your income to make the payments on your credit cards. If you are doing this, you will never be able to get off that wheel without some other type of action. Did you know that if you are making the minimum monthly payment on a credit card, it can take you over 15 years to pay off the credit card balance? 15 years! That's a long time to delay your financial future!

This is where bankruptcy will free you from the hamster wheel.

Instead of paying over $500 a month on credit cards and other bills, you may be able to file a Chapter 7 bankruptcy and wipe out those debts. If you don’t qualify for a Chapter 7, you may need to file a Chapter 13 bankruptcy. A Chapter 13 will give you a set payment plan for 5 years, but then you will be free from these debts. 5 years is a heck of a lot better than 15 years.

Let’s take a look at what these bankruptcy options can do for your financial future. If you are paying over $6,000 a year simply to manage debt, and you wipe that debt out through a bankruptcy, now you can take that $6,000 a year and put it towards your financial future. Even if you can only save 50% of that money, you will be able to save over $3,000 a year. If you invest that money at 4% interest, in 10 years, you would have over $36,000. That is a great start on a nest egg for you.  Just think of how much you would be able to put aside if you make it a practice to save 50% of any increases that you get in your income going forward!

With these simple steps and a bankruptcy, you could be well on your way to financial freedom. I am happy to offer you a free consultation before you make any decision, and I also have written several books that are available for you before you talk to anyone (including me)! Call our office for detailed information on how we can help you.

 

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