Declaring bankruptcy is often a bottom of the barrel, last-ditch solution when your financial situation has become so severely impaired that you do not have any hope of immediate recovery and repayment of debt under your current arrangements. Declaring bankruptcy can destroy your credit history, cause you to lose your property or other assets and make receiving future loans difficult, so it should be taken seriously. It is not a free pass, either – you will still be responsible for repaying as much of what you owe as possible, and using every possible asset you have to fulfill your obligations. If you fear that you are coming perilously close to these unfortunate circumstances, you should immediately meet with a reputable financial counselor to discuss other options.
Other options usually include negotiation with your lenders. Beware of shady debt settlement companies that may arrange a deal that will cost you more in the long run. The U.S. government recommends an approved list of financial counselors, which you can search through by location online. They can help you negotiate alternatives to bankruptcy like debt settlement or debt consolidation. If you are able to create a settlement agreement with your lenders, they may agree to significantly reduce the total amount that you owe in exchange for committing to a reduced monthly payment plan over a set period of time. Consolidation is another good choice if you have multiple debts with high interest rates. You can combine them into one bill, from one lender – with lower fees. It never hurts to ask credit card companies and other lenders for help, because they would often prefer for you to pay back some of what you owe rather than giving up on your debt altogether.
Before taking drastic steps, you should also analyze your budget carefully. Are there any expenses you can cut back on? Are there any assets you can sell? For example, if you have two cars, can you live with one, eliminating a chunk of your monthly costs? Thinking through your financial situation may help you start off on the right foot as you begin to rebuild your spending capabilities.
Previously, she worked as the Vice President of Programs for Junior Achievement of New York. She was responsible for reaching 95,000 K-12 students per year with financial literacy, workforce readiness, and entrepreneurship programming. Her team organized events for schools across the five boroughs of New York City, facilitating positive relationships between classrooms and the community. Ms. Gutmann has extensive experience building curriculum focused on life skills, and has partnered with dozens of corporations to train their employees to become volunteer role models.
Ms. Gutmann also created resources for both students and educators during her time as a kindergarten teacher in the South Bronx. She first entered the classroom through the Teach for America corps, and went on to receive her M.S. Ed. in Early Childhood from Bank Street College. She has developed web resources, professional development sessions, and parent workshops, and served as a graduate-level writing tutor and resume coach.
Before becoming a teacher, Ms. Gutmann studied Public Policy at Duke University, where she received her B.A. in 2002. She worked in Durham Public Schools as a reading tutor and photography teacher. She also spent time doing research for the American Federation of Teachers, and served as a consultant for the Wake Education Partnership.
Ms. Gutmann currently resides in Chapel Hill with her husband and her dog, a poodle named Noodle.
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