The word credit has undergone a subtle change of meaning. It used to be a means for businessmen to raise funds for expansion or a new venture, and was a word with very limited use outside the business world. Nowadays credit is more often taken to mean the opportunities for individuals to spend more than they earn and to live beyond their means, with a concomitant increase in the numbers declaring bankruptcy.

This situation however seems to have lost its aura of shame, and instead has become, whilst not quite a badge of pride, at least an apparently easy way out of a crisis of ones own making. In 2008 over 1 million individuals declared bankruptcy in the US; the trend would seem to indicate that the figure for 2009 will also grow.  Since 2005, where bankruptcies had dropped from the 2004 peak of over 2 million, the number of fillings have increased each year.

A further problem is the refusal by many people to see the problems they are facing and to deal with them whilst there is yet time. They tend to close their eyes and hope it will all work out, which to some extent it does by a declaration of bankruptcy! This can result in loss of their home and most of their possessions and, doubtless in many cases, the break up of their family.

Does the problem start in schools?  Not because pupils are going bankrupt, but because proper education in financial matters is virtually non-existent. This really would be useful education learning about the costs of credit, how to use credit cards responsibly, how to say no to that unrepeatable bargain, how to operate a bank account etc. All of which would be remarkably useful information in the credit crazy 21st century.

Currently, schools are not teaching financing classes and do not give high schools seniors a chance to learn about credit and debt before they go out into the world and getting solicited with offers for credit cards.  Having a clear understanding of how to manage credit and the effects debt has on a person’s ability to get credit, makes obtaining finacial goals much easier.

Tags: Bankruptcy, Chapter 11, Chapter 13, Chapter 7, Credit Card Debt, Credit Help, Credit Reports, Debt Relief, FICO, FICO Score, Personal Finance