Bankruptcy - The Frog and the Pot

The third most common reason for bankruptcy filing doesn’t have to do with a loss of income or medical illness, but instead the deceptive practices of the credit card industry.  People who have been lured in by such practices never meant to get in over their head - but slowly, over time, their debt has been building.

This phenomenon can easily be explained by the analogy of the frog and the pot.  If you drop a frog in a pot of boiling water, the frog will immediately jump out because it is hot. However, if you put the frog in some lukewarm water and slowly raise the heat, the frog will never jump out.  It will simply boil to death because it can’t sense the temperature slowly rising. 

That is what the credit card industry does to consumers.

Many credit card companies reel you in with the promise of a 0% interest rate and no payments for six months.  Then, God forbid, you miss a payment or are late - and suddenly that 0% interest becomes 27%. 

Now you can’t even afford to make the minimum payments.  Every payment you make is strictly interest. After that, the debt doesn’t go down.  You may find yourself having to make payments for the next thirty years in order to pay it off. 

What happens when the car breaks down or you get sick?  Filing for bankruptcy may be your only way out.