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Bankruptcy and Credit Cards Archives

Bankruptcy and Credit Cards

Americans are drowning in plastic, maxed out, buying too much — and more and more, forced into court as a last resort.

Cameras aren't allowed inside Judge John Ninfo's bankruptcy courtroom in Rochester, N.Y., but he's more than willing to talk about what goes on there.

"I'm not a sociologist and I'm not an academic," he told ABC News' "Nightline." "I'm just a bankruptcy judge from upstate New York who sees what I see around the system every day. But clearly, we live in this competitive, consumptive society where people are bombarded with advertising that tells them that they can have anything that they want, that they're entitled to.

"From what I see every day, is it the consumer credit that has resulted in the skyrocketed filings?" he asked. "There's no question about it."

"Credit Card Debt? Tell It to the Judge: Bankruptcies Are Up, and Judge John Ninfo Sees the Result," by Vicki Mabrey, ABC New, January 20, 2006

"Credit Card Debts Aren't Inherited," by Michelle Singletary, The Washington Post, December 29, 2005

Our tips:

  • Spend less than you earn.
  • Pay off your credit cards in full every month
  • If you use a credit card, use it like cash and get a no-annual-fee-cash-rebate card
  • Save at least 20% of everything you make, starting with the first dollar you earn.
  • Buy used cars
  • Buy the cheapest house in the most expensive neighborhood you can afford
  • Take full advantage of your employer's retirement plan and medical-spending and dependent-care reimbursement accounts
  • Don't borrow against your retirement savings or withdraw from them until you retire
  • Invest for the long term, in index mutual funds and in companies that have a history of increasing earnings.

10 Steps for Financial Independence - from "Financial Success Requires Saving, Spending Discipline," by Jonathan Clements, The Wall Street Journal, May 5, 1998.

    1. Sign up for your employer's retirement plan. (make savings a habit)
    2. Pay off your credit cards. (leave your cards at home and stick to cash)
    3. Set up an automatic investment plan. (dollar cost averaging)
    4. Make a ritual sacrifice.
    5. Organize yourself.
    6. Invest all financial windfalls.
    7. Round up your mortgage check.
    8. Manage your cash for maximum return. (don't leave extra cash in a savings or checking account)
    9. Act your tax bracket. (or, better yet, act BELOW your tax bracket)
    10. Invest for the long haul. (five years)



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January 21, 2006 11:17 AM

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