Government Furlough: How To Survive – Part Two
How to Survive The Government Furlough
by John G. Merna
Earlier this week I discussed some simple steps to surviving the Government Furlough that so many here in Hampton Roads and in Richmond will be facing. Here are some honest questions and answers about where you may find yourself in the coming months.
Question: Do I borrow money to survive the government furlough?
Maybe. It depends of the terms. Family – no interest and easy repayment? Great. Withdraw from retirement? Pay penalties and taxes – not great. Borrow from Thrift Savings or 401(k) – no interest, but will have the monthly repayment taken out of your check which could squeeze you later. Credit cards? Digging a deeper whole. Payday loans? The whole turns into a grave and you might as well come see me about a bankruptcy.
Question: How bad off am I now?
If you are living paycheck to paycheck now with your credit lines maxed out – bankruptcy maybe. If you have been barely able to pay your credit card debt even before the furlough – bankruptcy maybe. If you were already behind when the government furlough occurred – bankruptcy definitely.
Question: How bad is bankruptcy?
The answer is “not bad at all” but don’t tell anyone. Huh, you ask? Think of it this way. What is your credit score worth? Ten thousand dollars? Twenty Thousand Dollars or more? The average person with $10,000 to $15,000 of debt will pay three to four times that in interest over years of struggling and working. Bankruptcy – you are debt free the next day and rebuilding your credit to the point of buying a house as quickly as two years later. You save thousands of dollars and get out of the credit trap you buried yourself in. Less stress, more available money, more options. Not bad at all.
Question: So why don’t more people file bankruptcy?
Well, a lot do – about 1.4 million a year. The stigma is the primary reason I would say that more people do not file bankruptcy each year. We have been trained to protect our credit. Why? So we can borrow more and spend more, so the companies that lend to us can basically reap a portion of our wages for the rest of our working life. Doesn’t that sound like a brilliant get rich plan? Unfortunately, we are a capitalist / consumerist society and that means the worker bees generate the honey for the queen bees to enjoy. Wouldn’t it be nice if we really could enjoy our own honey?
So, back to the government! Why is the government furloughing people? So it can reduce expenses and afford to pay its bills. But wait a minute, the government furloughs and you may have to consider bankruptcy?
I’ve got a better solution. Let the government go into bankruptcy and you keep your income and pay your bills. Did they think about that?
Just don’t think you are in this alone. We are here to help.
P.S. How many Congressmen are getting furloughed? You know the answer to that.