Matthew Dunaway Attorney at Law August 2018 · 205-705-3590

August 2018

THE REAL DEAL Stop Making Decisions Based on the Nebulous

When new clients sit down to talk to me, they often have one very important question: Will I ever have credit again after bankruptcy?

What I call “the nebulous,” other people may call “the abstract” or “virtual,” but it all means the same thing: not real. When I call a credit score nebulous, I’m saying it’s not real, at least not compared to the factors that do have a say in your financial situation. Rather than ask, “Will I have credit again?” it’s better to ask, “Will I be able to pay for groceries?” because that’s what really matters. Bankruptcy offers a fresh start to recover your financial health, but you need to use that fresh start wisely. The number on your credit score is far less important than the number on your bank account, and whether or not that number is enough to pay for groceries, make your house payment, fill your car up with gas, and pay for life’s other necessities. Your income is real. Your bills are real. Your credit score is not real, nor does it give an accurate picture of your financial state. I have met people who walked into my office with beautiful scores of 700 or 800 but were in a terrible financial situation. Each month, they pulled in more debt, using credit cards to keep their score up and just barely managing to skate by. They are only able to keep their balancing act going for so long, and when it comes crashing down, they’ll have a lot of work cut out for them. I’m not saying you should ignore your credit score completely. Few people can pay for a house for their family to live in with just cash. Some

The short answer is yes.

Here’s the long answer: If you want to keep from falling into this situation again, you need to change your mindset from dwelling on the nebulous to focusing on what’s real.

debts are necessary and credit can help with that. But the state of your credit score should mean less than whether or not you will actually be able to afford that mortgage payment. Please note that I never said changing your mindset is easy. Every day, we’re bombarded with the mantra of credit: “Buy now. Pay later.” It’s easy to become accustomed to it. We say yes to every store credit card because it “saves 20 percent today,” but, like a fish hook, if you try to get that sucker out, it hurts. We cannot live without ever taking on debt, but we can be mindful about what debt we incur. Prioritize what’s real over the nebulous, and you can start to change your mindset for the better.

Bankruptcy offers a fresh start to recover your financial health, but you need to use that fresh start wisely.

At some point, a person’s credit score became the be-all and end-all to their financial situation. But why do we let a number that we never asked for have such control over us? A credit score isn’t going to pay for groceries or help us get out of debt. In fact, the only thing our credit score can do is help us get into more debt! How is that a good deal?

Call today – 205-705-3590 1. –Matt Dunaway

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