Apparently in the US a new bill has passed that prevents people from being able to wipe out their debts by simply filing for bankruptcy. Instead, people with a certain level of income will be forced to pay back a portion of the debt over the next couple of years. The bill is suppose to be in response to events in the past such as the Enron fiasco or how a lot of people who file for bankruptcy are wealthy individuals who use bankruptcy protection as a way to avoid paying off debts which they could easily afford. In the process of this I’m sure there are people who have a legitimate use for bankruptcy protection and will be severely affected by this.
Maybe I’m in the minority, but I personally think this type of law will help people become more responsible with their money and will force them to think ahead more thoroughly before making decisions that could heavily impact them financially. For example, most of the interviews that I have seen so far in regards to the type of people that this law would affect were people with families who were swarming in debt accumulated from interest rates from some sort of loan. When asked how they ended up with such a huge debt they mentioned that they were enticed by those no interest payment plan offers and after it expired they did not pay the bills on time and so they were forced to pay incredibly high interest rates. In terms of finance, everything from household essentials to having kids revolved around the belief that the loan they received would help provide them the money they needed to do all the things they wanted at that moment with minimal sacrifices. While I still personally go by the spend only what you have mentality, anticipating potential hurdles is often overlooked by many.
Like running a business, I personally think one should constantly be thinking of ways to improve and maintain their financial challenges. For example, let’s pretend that I am running a business selling lemonade and virtually every day the same ten people buy a glass of lemonade from me with 50 percent of the revenue being enough to cover daily expenses. What would happen with most people is that they would get comfortable with the situation and so it essentially becomes a routine with finances relying on this happening every day. Now what would happen if my customers grew tired of the lemonade, I became injured in an accident or some other unexpected event? Without thinking ahead I would be setting myself up for disaster. If I had to file for bankruptcy afterwards, I’m sure most people would be sympathetic about the situation but at the same time a lot of people would probably believe that I got what was coming to me as the lack of planning and vision for the business was the ultimate reason for the closure. In that sense, I believe the responsibilities and accountability should be the same when it comes to ones personal finances.
If you don’t have enough money, find other streams of income. Can’t find other streams of income? Start cutting back on non essentials like the TV. Either way, there is always a solution.