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Financial exposure occurs when a debtor allows himself to be at high risk of losing money. There are many reasons for this, and more often than not, leads to overwhelming debt and a loss of financial control.  How does this happen?

Many factors can contribute to debt issues. Illness, divorce, job loss to name a few. However, sometimes it is just a matter of using poor financial judgment such as excessive spending habits or poor budgeting. In either case, there are signs or red flags to be aware of in terms of exposing yourself financially.

The more financially exposed you are, the higher risk of losses and problems.

If you are drowning in debt, personal bankruptcy may be part of the solution. The other part is recognizing and accepting your mistakes. Here are some critical mistakes that debtors make foreshadowing a financial mess.

Running a monthly balance on your credit cards. Credit cards are a killer when it comes to monthly interest rates. You end up paying thousands of dollars to your credit cards without lowering your balance. Try and use a debit card. Debit cards deter you from impulse purchases, so you are more prone to buy what you need, not what you want.

No budget in place. Budgets are important because they spell out exactly what you have coming in and going out.  Not having a budget can result in overspending and not knowing where to cut back. No budget can lead to no control.

Not realizing the total cost of a purchase. There are a number of large purchases where consumers often don’t recognize the total cost. Buying a house or car are great examples. There are a number of extra expenses such as insurance, repairs and maintenance that add to the total cost.  Not recognizing the big picture can shatter a dream, leading to tremendous personal debt.

No retirement plan.  Not having a retirement can be a huge detriment to the quality of your retirement years. Social Security benefits only provide enough money to live at poverty level. Everyone should be putting money away on a monthly basis, no matter how little. Retirement plans have favorable tax requirements so there no reason not to have a plan. Look at it as a necessity, not a luxury.

If you are in debt and feel like you have lost control of your finances, personal bankruptcy might be the answer for you. The bankruptcy attorneys at Hines Law, representing clients throughout  Massachusetts have extensive knowledge and experience. We handle all types of personal debt relief matters and are committed to safeguarding your interests and future. Call us today for a Free consult!