Debt Default Release Order

There is a great post at Money Beagle about debt relief orders and the type of person that would benefit from using such a service. Debt relief orders are alternatives to bankruptcy that do not cause quite the destruction to your credit that an outright bankruptcy would. Also, debt relief orders are most useful when you have an overwhelming, yet not grotesquely large, amount of debt to pay off. These products are designed for people who are in such awful financial shape that no realistic plan could ever enable them to pay off their debt fully--let's say you have $100,000 in credit card debt and you are middle-aged and earning $35,000 per year. Hopefully, you'll never find yourself in the type of situation where you have to seriously consider a debt relief order. But, as we all well know, life happens, and sometimes we have to make decisions where we have to choose the lesser of two evils. My area of expertise is definitely not debt relief orders, so if you want to read a more authoritarian source on the subject, be sure to check out this guest post at Money Beagle: http://www.moneybeagle.com/2011/06/what-exactly-is-debt-relief-order.html

Thoughts on How To Avoid Debt

You can't get ahead paying 18% interest to creditors. That's just a fact. Even if we pretend that it's 1960 and you invest some money with Warren Buffett's flagship Berkshire Hathaway, you're still not going to get ahead if you have to contend with minimum payments on debts compounding at 18%. Berkshire Hathaway, arguably the best investment you could have made in the past forty to fifty years, has only compounded at about 20%. So if you have high credit card debt, the odds that you'll get ahead are very slim. Without a doubt, the simplest solution is to avoid the debt in the first place. If you don't eat the ice cream, you won't have to lose weight. If you do find yourself in credit card debt, the first thing you have to do is stop increasing the debt, and from there, if you make double the minimum payments, you'll eventually dig yourself out of the hole. If you want to read a good article on avoiding debt in the first place, check out this gem from 'Not Made of Money,' link here: http://notmadeofmoney.com/blog/2011/07/five-ways-to-avoid-debt.html