We all want financial independence and the confidence and peace of mind that come along with it. But women, just like men, are facing a lot of stress and anxiety-inducing situations on a day to day basis. But, there are special situations that require women to tread on financial planning and debt management issues carefully.
Here are factors that you may want to consider when answering the question, “Should I consolidate or file for bankruptcy?”
Increased life expectancy
This is good news! You can outlive men of the same age, by five to six years. But are your retirement savings enough to pay for health care, living arrangements and daily expenses in your later years?
Unemployment and low income
Women usually take time off from work when raising children. Some prefer to be stay-at- home mums, either as a full time mother or a home based worker. While the base pay for home workers are increasing because of the increased demands for freelancers in the past few years, still some women prefer the stability of having a full time office job and its perks. Unfortunately, break in employment could signify lower income, lesser contribution to retirement savings plan and lower emergency fund savings. As less income comes in, and more money goes out—many women have lesser ability to prepare for retirement.
More expensive lifestyle
This may not apply to all women. Some prefer very simple lifestyle which can even outdo men in the budgeting department. However, for women who opt for a little bit of pampering–the cost of cosmetics, beauty products, yoga and fitness programs are high. Diet and detox programs and certain fashion statements may also cost more than the average budget for average consumers.
Frequent and recurrent consumption of slightly higher than the average cost of clothing, accessories, beauty products and shoes may take a huge chunk of your current budget.
There is nothing wrong with these purchases, as long as it is within a person’s capacity to pay for these items—in cash. The moment you borrow from your future income, by charging it on your credit card because you cannot afford to pay it in cash, it can be considered as excessive spending already.
The secret lies in creating a specific budget for these items to curb excessive spending on this category.
Pros and Cons of Bankruptcy
Bankruptcy is an option for people who want to restructure their debts and get away from financial obligations. If you are amenable to a supervised repayment plan, in exchange of your assets, like bank accounts, residential property, commercial establishment or personal items like jewelry and car, go for bankruptcy.
Creditors and debt collectors would stop harassing you and no one can file debt-related lawsuits (for debts included in your bankruptcy application) and foreclosure proceedings against you. There is no need to worry about your medical debts and consumer debts because bankruptcy would take care of it. In short, you will have zero debts but you may end up having zero assets as well. Your credit score may suffer and your bankruptcy record would stay there for years and you would have to look into credit repair.
Pros and Cons of Debt Consolidation
If you want to get rid of debts by repaying them and save money in the process, you can opt for debt consolidation. There is no need to go to court you will have no records of bankruptcy on your credit file and the credits or debt collectors will not bug you also when you settle your debts. Debt consolidation gives you a chance to start with a clean slate. All it takes is to apply for a debt consolidation loan and all your consumer debts and other existing debts shall be paid off. In return, you will have to pay one single debt for the rest of the loan period, probably with lesser interest rate, lower duration (or a longer one-depending on you) and with more favorable terms. The obvious downside of debt consolidation is that you still have debts to pay, although it is much lower than your current debts.
So, the choice is yours. Consider the factors above, and decide which one would fit your situation.