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Illusion of Credit? Maxed Out?by John G. Merna

No Borrowing Power Equals No Credit. Think About It.

Not a week goes by that I don’t speak to a person, say from Virginia Beach, Newport News or another local city, who is stressed by their finances and investigating a bankruptcy fresh start who says “But I don’t want to file bankruptcy and ruin my credit.”

Most of the time I will ask about the comment and their credit only to find out that they are unable to pay their bills and haven’t for a long time.

“What credit?” I respond with surprise. “Your score is in the toilet if you haven’t been paying your bills. What credit are you protecting?”

In some cases the client, maybe from Chesapeake or Norfolk, advises they are current on their debt and have a “good” score.  But upon further investigation I find they are paying enormous minimum monthly payments, sometimes as much as $500 to $1000, and are maxed out on their credit limits.  Regardless of their large monthly payments their balances do not shrink.  It is like they are throwing money down a well.  And on top of the draining monthly payments and maxed credit lines they are unable to qualify for any additional credit. They are often robbing Peter to pay Paul.  Unfortunately, Peter is the monthly necessities and Paul is the never-shrinking credit card balances.  Sometimes it is worse and Peter is their retirement 401(k) and they are robbing it to pay their credit card debt.

Once again, my response is “What credit?” They are not protecting any credit.  It is just an ILLUSION.  And there are a lot of people in Hampton Roads holding on to this illusion.

We have been so indoctrinated into thinking that the “good” or “bad” used in describing our credit rating actually applies to our character.  We are frightened of being “bad” people.  Well, bad credit doesn’t make us bad people any more than good credit makes us good people.

The question we should be asking ourselves personally is “What value does our credit have to us?”

Stay tuned for tomorrows blog where this and other questions are answered.




 The Merna Law Group, Attorneys At Law, P.C. …very helpful and friendly!5 Stars! “Everyone at the office was very helpful and friendly. The attorney answered all of our questions and helped us through the entire process. He was also very helpful answering concerns that we had after the process was completed/over. Highly recommended!” Reviewed by M.E. of Virginia Beach on Mar 11 . 
 The Merna Law Group, Attorneys At Law, P.C. Didn’t have to worry about anything!5 Stars! “Just keep providing the type of service you do. You business values are based off reliability and service. Today’s Law Offices just don’t offer that kind of experience. Didn’t have to worry about anything!!! Just being able to go on with my normal life and know that all my issues are well taken care of is a relief in itself.” Reviewed by A.P. of Virginia Beach on Mar 4 . 
 The Merna Law Group, Attorneys At Law, P.C. …kind and friendly from the start!5 Stars! “Everyone there was kind and friendly from the start and helped us with everything in a timely manner. They were never rude no matter how much we called or asked questions.” Reviewed by B.P. of Virginia Beach on Feb 20 . 
 The Merna Law Group, Attorneys At Law, P.C. …overall experience was outstanding!5 Stars! “My husband and I were very happy with The Merna Law Firm. They are well organized, time manageable, and friendly. I was even able to bring my children with me if I needed to. In court, they stayed right there beside us and answered all questions we had. Our overall experience was outstanding and I am glad we were represented by the Merna Law Group.” Reviewed by A.M. of Suffolk on Mar 5 . 
 The Merna Law Group, Attorneys At Law, P.C. …debt free!5 Stars! “A friendly staff and outstanding attorney who helped me through a difficult time in my life. Thanks to everyone at the Merna Law Group who helped me move on to and new chapter in my life debt free!” Reviewed by M.F. of Norfolk on Mar 8 .