It is not difficult nowadays find yourself trapped by debt, too often, we leave ourselves be enchanted by the policy of “buy now and pay later”.
This policy has generated a lot of trouble to several families and to me personally. I had got to a stage where I had exaggerated in the demand for loans.
This can happen to anyone, as it did to me, maybe you bought an asset when the family income was two salaries, here starts the “two-income trap“, what is it? Well I would budget on the thought that we would have constantly two salaries in the family, and therefore we ran debts for two salaries.
As soon as I lost my Job, those installments became unbearable and we were no longer able to meet our monthly commitments that we had previously agreed to, in good times, when economic conditions were more prosperous.
The question was how were we supposed to settle our debts? Should we have waited for the bailiff? We did not. When you realize you have become insolvent on many fronts, it is good to try to contact your creditors to reconcile a different repayment plan, many are even dusting off the old bills and are more than happy to accept restructuring, instead of been caught with bad debt. Financial institutions, so as not to waste time in lengthy legalities, often agree to these forms of payments.
Well it is easy for me to speak now after we had taken the drastic decision to get a new Identity and move to another state. We had to fake our social security numbers, had bought fake passports and were constantly hiding from the law. It was a nightmare.
Now thinking back another solution was to bring together the previously accumulated debts into a single debt, usually with lower interest rates. Later I found out of the existence of this so called “debt consolidation”.
We have been lying low with our new identities for over three years, waiting for any record to die out. We found out these procedures often take time and they can start quiet late. Had we chosen instead an immediate bankruptcy, we could have been halfway through our clearance.
After a lot of research I found out that if debts are just too high and all your property is insufficient to repay the debt, you can declare bankruptcy. In this way each debt will be blocked and practice will be sent to court, where there will be a renegotiation with creditors. The time frame for recovering from insolvency would have been less.
After many years of remorse with our new identity, I believe it is always good to consider the family as a company and calculate carefully what comes in and what goes out, in order not to have an unexpected credit noose around your neck.