Income Interruption - Unless You Have A Safety Net Bankruptcy Becomes A Real Possibility.
- Date: 2007-06-28 - Word Count: 475
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At some time in our past a wise sage stated, "Failing to plan is planning to fail". These words have never ringed truer than in this and age. A financial crisis is looming, some experts claim it is actually upon us, and Americans are faced with the reality that their ill-conceived spending habits are catching up with them. In today's precarious balance between debt and income all it may take is a slight push to topple the entire thing. One such "push" is a sudden loss of income.
Anything that causes income to decline puts a family at risk for bankruptcy. Layoffs and firings create a vulnerability which if not addressed may start a domino effect in which the one may end up in financial ruin. Bankruptcy then becomes a very real possibility. If you are unable to meet debt obligations, such as your monthly mortgage, being unable to stop foreclosure becomes a harsh reality, which no one really wants to contend with.
Even finding another job doesn't always solve the problem. The time period without income may create insurmountable debt, especially if one was carrying substantial debt loads prior to the loss of income.
Other income-related setbacks may contribute to the debt versus income mismatch. Unemployment isn't always the cause of this problem. Losing overtime hours or moving from a salaried position to commission sales for example may be enough to tip the scales.
You may be caught up in a company downsizing, a growing trend these days. If this position provided the majority of a household's income this has a sudden and drastic effect. People are finding themselves a part of the growing bankruptcy curve because they lost their jobs, often positions held for years and thought secure.
How can one prepare for a potential income loss? The knee-jerk reaction is to save money. Given the relative stagnation of income and salaries over the past decade coupled with the rising costs of living this may be more wishful thinking than reality. Consider first taking a look at your spending habits. This is area most discover they can reduce expenditures, in some cases saving hundreds of dollars monthly. Credit cards, department store cards, frequent dining out, frivolous weekend trips, and many other income-draining activities exist that can be cut back on or eliminated entirely.
You have to decide just how close to the edge you wish to tread. Consider a lesson from our grandparents and great-grandparents. Those generations were forced to live below their means and most were still able to secure a monetary buffer against income interruption.
Take a good hard look at your financial situation. Take advantage of the many agencies offering consumer credit counseling. There are countless resources available to help you once you have decided to take action. Taking action is the key in preparing for the possibility of income interruption.
Anything that causes income to decline puts a family at risk for bankruptcy. Layoffs and firings create a vulnerability which if not addressed may start a domino effect in which the one may end up in financial ruin. Bankruptcy then becomes a very real possibility. If you are unable to meet debt obligations, such as your monthly mortgage, being unable to stop foreclosure becomes a harsh reality, which no one really wants to contend with.
Even finding another job doesn't always solve the problem. The time period without income may create insurmountable debt, especially if one was carrying substantial debt loads prior to the loss of income.
Other income-related setbacks may contribute to the debt versus income mismatch. Unemployment isn't always the cause of this problem. Losing overtime hours or moving from a salaried position to commission sales for example may be enough to tip the scales.
You may be caught up in a company downsizing, a growing trend these days. If this position provided the majority of a household's income this has a sudden and drastic effect. People are finding themselves a part of the growing bankruptcy curve because they lost their jobs, often positions held for years and thought secure.
How can one prepare for a potential income loss? The knee-jerk reaction is to save money. Given the relative stagnation of income and salaries over the past decade coupled with the rising costs of living this may be more wishful thinking than reality. Consider first taking a look at your spending habits. This is area most discover they can reduce expenditures, in some cases saving hundreds of dollars monthly. Credit cards, department store cards, frequent dining out, frivolous weekend trips, and many other income-draining activities exist that can be cut back on or eliminated entirely.
You have to decide just how close to the edge you wish to tread. Consider a lesson from our grandparents and great-grandparents. Those generations were forced to live below their means and most were still able to secure a monetary buffer against income interruption.
Take a good hard look at your financial situation. Take advantage of the many agencies offering consumer credit counseling. There are countless resources available to help you once you have decided to take action. Taking action is the key in preparing for the possibility of income interruption.
Related Tags: bankruptcy, income, foreclosure, job loss, interruption
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