National Debt Relief - BBB Accredited Business - Get Relief From Unsecured Credit Card Debt, Medical Bills And Student Loans

Free Debt Relief Quote

We Take Your Privacy Seriously.

Call Now! 888-703-4948

National Debt Relief, LLC BBB Business Review

Avoid Bankruptcy: Lessons You Can Learn From Athletes

bankrupt definitionWhile there are many hidden dangers in filing for bankruptcy, there are cases when it is necessary. We cannot say that it is not an effective debt solution. It is – but only for those who are in a real financial crisis and does not have the means to improve their situation anytime soon.

But that also does not mean you cannot avoid it. There are a lot of things that you can do to avoid bankruptcy. There are debt relief options that can serve as better solutions to your credit problems. Not only that, you can implement certain personal finance habits that will keep you from making the mistakes that will lead to bankruptcy.

The bankruptcy statistics in the US

The USCourts.gov released the latest statistics about the bankruptcy situation in the US. Apparently, a lot of people are still filing but there are more people who are able to avoid bankruptcy. The statistics show that:

  • In 2013, the bankruptcy filings decreased 14% to 1.17 million, from 1.36 million in 2012.

  • Bankruptcy terminations also decreased from 1.38 million in 2012 down to 1.24 in 2013.

  • Pending bankruptcies are down by 4% to 1.57 in 2013 – from 1.64 in 2012.

Although the figures are obviously improving, it is still a significant amount. The Department of Justice also tracked how the bankruptcy filing rose from 110,000 in 1960s to 1.6 million in 2003. This was before the recession in 2008. According to statistics compiledby the BankruptcyLawInformation.com, only one third of all filings are discharged successfully in Chapter 13.

On the same site, an article titled “Wrestling with Bankruptcy” is mentioned to reveal that the filings are now greater than double of the filings that happened during the Great Depression. This growth is comparing a year to a decade of that notorious recession.

The website also showed that the people who were unable to avoid bankruptcy blamed credit card debt (63%), mismanagement (50%), job loss/pay cuts (37%) and medical bills (28%). The most alarming part of this information is that 50% blamed mismanagement. It seems that it does not really matter how much you are earning. If you cannot manage your money well, you will really be in trouble.

A perfect example that you may want to look into are professional athletes. They earn millions of dollars every year and that does not even include their endorsements. But despite that, a lot of them are going broke.

3 reasons why professional athletes are going broke

It pays to take a look at the financial plight of our professional athletes to help you avoid bankruptcy. If we can identify why they ended up in financial ruin, then we may be able to keep ourselves from making the mistakes that they did.

It’s like winning the lottery!

One of the most prominent reason for bankruptcy, as mentioned in the statistic is mismanagement. A lot of the athletes who are famous did not come from prominent families. They were not born out of millionaire parents. In fact, a lot of them chose to drop out of a complete education to pursue a professional career in sports because they found more financial promise in playing.

So when they started earning millions of dollars, guess what they felt like? They felt like they won the lottery! And we all know how that ends out. A lot of lottery winners failed to make their money last. According to StatisticBrain.com, 44% of lottery winners take only 5 years to spend their winnings.

Athletes spend most of their income on new homes, luxury cars and a very affluent way of living. Most of them who failed to avoid bankruptcy were those who did not practice smart spending. In the end, the reckless spending cut too deep into their earnings and most of it went to unnecessary expenses and a lot of junk.

Everyone becomes your friend.

While being blessed encourages us to bless others too, you need to keep it in moderation. It is okay to help family and friends but not to the point that they become dependent on what you give them. If you want to give them something, it has to be a one time gift that will help them generate continuous income for themselves.

Some athletes have said that they have had a lot of people coming to them asking for financial help. In one interview, Shaquille O’Neal mentioned how he had to steel his heart to say no to some of the requests that come his way. He had to do it to protect his and his family financial future.

Ignorance is not bliss.

Lastly, the mismanagement was brought about by professional athletes’ inability to implement proper financial habits. This is simply caused by the lack of knowledge on what to do. Remember that a lot of these athletes failed to complete their studies because they chose to pursue a professional life immediately. The chances of even the college graduates having adequate knowledge on personal financial management is also slim.

Most of them had to rely on financial managers who may be more concerned about their commission than the welfare of their clients.

If you want to make sure that you will avoid bankruptcy, you need to ensure that you will educate yourself about the right way to handle your money. This is easier than before simply because of the presence of the Internet. You can simply Google financial management articles and you can find useful information that can help you make smarter choices about your money.

3 sports principles you can use to stay away from bankruptcy

While looking at the plight of bankrupt athletes will help us avoid the same situation, there are also three principles that you can learn from the whole industry in general. These help athletes win in their sport and it can also help you triumph over your financial difficulties.

Know the game

The first principle is knowing the game. You need to understand what you are doing to be able to make smart choices about your money. Just like an athlete learns the rules and techniques to help them win the game, you need to do the same for your finances. In the end, financial problems can be avoided if you only know the consequences of your actions. And more than that, knowledge will assist you in finding a solution to your problems.

Practice self-control and discipline

Sports is all about self control and discipline. Before a big game, athletes spend months training and following a healthy regimen to ensure success. You need to get your spending under control too if you want to keep yourself from the mistakes that will lead to your financial demise. Practice control by making a “to-buy” list before a shopping errand. You can also discipline yourself by sticking to paying in cash than credit cards.

Always have a plan

The final principle that you need to learn is to always have a plan. An athlete’s training is very organized and under a strict plan. From their diet to their schedules – all of these are meant to keep them from failing. Your finances will need a lot of plans too. You can start with a budget plan that will ensure that all your priority expenses are paid for. A spending plan is also helpful in keeping you from buying things that you do not need. Other plans for your financial goals will also prove to be helpful. For instance, your retirement plan will ensure that you will have enough money when you retire. All of your goals will have a better chance at being met if you take time to plan it.

To avoid bankruptcy, you really need to be always on the lookout. Make sure that you will not put yourself in a financially compromising position that will force you to declare to the world that you failed in your finances.

Here is a video from National Debt Relief that hopes to enlighten you about whether or not you should file for bankruptcy.

Do you qualify for debt consolidation?

Mobile Menu
MENU