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Consumer credit counseling a way to manage expenses
By Oscar Monfort on Mar 15th, 2010
Before people declare bankruptcy, they should probably make sure they know how to live within their means.
In a recent column for the Los Angeles Times, personal finance expert Liz Pulliam Weston published a letter from a reader who was considering bankruptcy after he finally quit his business. The reader has $68,000 in credit card debt, which he will be able to pay off in 40 months.
Rather than take that long, and in order to save for his son's college education and his retirement, the writer thought of Chapter 7 bankruptcy. However, given his financial situation, Pulliam Weston said he was probably not a good candidate for it.
"People who are allowed to file for Chapter 7 bankruptcy liquidation typically have far more debt than they could repay in that time period," Pulliam Weston wrote.
The columnist said the reader should probably take a look at how he managed his finances, as living outside of his means may have been one reason he got into trouble in the first place.
Given that, some consumers may consider going to a consumer credit counseling agency, which can provide advice on budgeting and managing expenses in a way that fits their income. It may also help through debt consolidation, which can lower the amount of interest a person pays over time.
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