I am often asked about borrowing money to pay off other creditors. My response is always the same, you cannot borrow your way out of debt. If you are having financial problems, it may seem that borrowing money may be the answer. Borrowing money by itself is never going to work to get your debts under control.

I hear prospective clients say all the time, but, business borrow money all the time!! That is true, but, they are borrowing money for a purpose. They are either going to borrow money and use it to make more money or to reduce your expenses.

A business may be borrowing money to retrofit a business location to make it more energy efficient, to upgrade equipment or to do something that will cause expenses to go down or income to go up. The Empire State Building has just gone through a big energy conservation expense and I am sure borrowed money to cover those costs. The energy savings are expected to be over four million dollars a year.

If you are going to borrow money, are you really ready to make the changes that will make things better at your house? I always hear about the second job the person will work, the overtime or some other way you will bring in more money. My question to you is, you mean you have not already done that?

Likewise, I often hear how a family will tighten or reduce its expenses. My question is similar, you mean you have not bothered to reduce expenses already?

What I am really saying is that I know that you would have already done that if you could. You are not going to bring in more money nor reduce your expenses, no matter what you are telling me or yourself. You have already tried to do this before you thought about trying to borrow the money.

Do not try to borrow your way out of debt, the only way to get out of debt is to increase your income and/or reduce your expenses.


About Nathan Davis, Esquire

Born in Charleston, South Carolina, Nathan Davis has been practicing law for many years. Mr. Davis has a wide variety of experiences having practiced domestic relations, criminal law, social security law having also practiced collection law in the past. This knowledge is helpful when someone needs to restart their financial life. The practice is now primarily bankruptcy and debtor representation work, but, Mr. Davis continues to also practice real estate law, trusts and estates and a general litigation practice. I believe that the most important part of representation is trying to leave you better off when the case is finished than when you started. Although I will do as my client directs, I will always tell you if I think that you are making a mistake. Bankruptcy is about a "fresh start". If you do not make changes in what you are doing, you will be doing what you are doing now in the future. There is no shame in bankruptcy or other steps that you may take to start your life over. Too often, people worry more about things than about themselves, their family or their future.
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