With the current economic crises, word such as credit, debt, interest and bankruptcy are not uncommon to us. After the Great Depression in the 1930s the current recession has been the worst financial crisis. Many people ,and still are due to the still ongoing recession. Filing bankruptcy was the only option for most.

Mortgages being defaulted was what intitially led to all these problems. The growing rates of interest played a major role behind the increasing amount of people defaulting on their mortgages . This in turn lead to the credit crunch which left several industries struggling to survive. A major industry that was affected by the credit crunch was the automobile industry. That automobile which depends on credit sales such as hire purchase agreements and leasing, lost a large portion of its revenue and therefore began to crash.

This eventually had a great impact on several other countries. As a result, other countries had similar effects. Growing rates of unemployment, increase in prices of goods etc.People all around the world struggled to live as they could no longer afford their mortgages.

Many people in the retirement age, living off pension funds really suffered due to the rocketing prices of goods, increasing interest rates on their mortgages and were forced to leave their homes, being left with no choice but to file bankruptcy.

With regard to filinf bankruptcy, financial experts are of the view that this is not absolutely necessary. Getting rid of credit cards is the best way to start off in order to prevent yourself from having to file bankruptcy. Credit cards are one of the main causes of excess debt. Credit cards promote splurging and a majority of the public usuallyend up spending more than they can afford. This excess spending, leads to huge credit bills and sometimes being unable to pay it off and having to filed bankruptcy. Secondly, it is best to avoid buying more houses than one can afford. Interest on mortgage payments can be really expensive and in the event of the person not being able to pay, they will either have to give up the house or other securities, or file bankruptcy.

Most experts recommend credit counselling for people to become more aware the choices available to them.

Popularity: unranked [?]