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Ask Dave

Breaking the Cycle of Getting In Debt

When it comes to rebuilding after bankruptcy and establishing your credit rating, Rodney went from bad to bad.

QUESTION: Rodney and his wife had a bankruptcy discharged a year and a half ago. He opened up a credit card because he was told he needed to re-establish his credit rating. He’s now three months behind and owes $400. Should he settle with the credit card company, or just offer them the monthly payment? Dave has a lesson for Rodney, but also a harsh reality.

ANSWER: Let me rehash what you just said, with different words. You went into debt and couldn’t pay your bills because debt messed you over, then filed bankruptcy and went into debt again. Now you’re screwed up again. That is kind of a dumb plan and whoever told you to do this is wrong.

You have to think for yourself. You need to stop and think and know that the debt you borrowed made you bankrupt. Don’t borrow money and don’t buy anything unless you can pay cash for it. I don’t give a crap what your credit rating is! Your credit rating isn’t an indication that you have money; it’s an indication that you have debt! Worry about this as fast as you can. learn your lesson from this and never go back.

Just $400 shouldn’t end your life. Get on a written budget that looks like beans and rice and get some money saved to pay this bill. Have a garage sale and pay this bill this weekend. Then close the account and never do this stupid thing again. This was a stupid behavior, and you don’t need to do it again.