Staying afloat

Personal Finance: Some simple lifestyle changes can help keep bankruptcy at bay | David Bahnsen

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The subject of "bankruptcy" is back in the news. Individuals, families, and companies are embracing again the protections that going bankrupt provide—namely, the ability to walk away from one's financial obligations. What causes a person or an organization to go bankrupt? What should Christians think about such a notion? Are there things we can do in our own financial planning to help avoid such a drastic measure from taking place in our own lives?

It is probably too simplistic to say that one goes bankrupt when his obligations become greater than his ability to pay them. But simply put, when a person has more debt than assets, and less cash flow than his debts require, the bankruptcy option appears to be the only way out. No matter how simplistic it may seem, the easiest way to avoid bankruptcy is to avoid consumer debt. When an individual runs up massive credit card balances, the "minimum payment" each month can become a daunting amount to have to cover.