Car Loans: Most people who file bankruptcy have car payments. You don’t need a new car. There are plenty of reliable used cars for under $4k. I would recommend driving a car like this for a few years until you have saved enough to buy a nicer car.
Credit Cards: Credit cards are an easy way to charge up thousands of dollars in debt. Do yourself a big favor and start paying in cash. You’ll save money from avoiding late fees and you might also find you spend less when you pay in cash.
Mortgages: Houses are great, though you don’t want to sign up for a mortgage you can’t afford. I would recommend keeping your mortgage under 30% of your take-home pay. Anything more than this ties up too much of your income to win with money.
Eating Out: Eating out every lunch can easily cost you $2,500 a year. Add a daily cup of coffee to that lunch habit, and you’re looking at around $4,000. You could easily purchase a reliable used car with that much money. Try changing your mindset and start viewing eating out as a treat, not a habit.
Changing these financially destructive lifestyle choices can go a long way toward avoiding bankruptcy. Though getting out of excessive debt can require bankruptcy. If you live in the Modesto area and are interested in bankruptcy, feel free to give our team of Modesto bankruptcy lawyers a call to schedule your free consultation.