Many people today are on a bullet train ride to financial disaster. With no savings plan, no reserve fund behind them and an out of control spending habit, these people are just gliding along until the track runs out.

Unfortunately, they don't seem to realize that the tracks lead to a cliff edge and the train track bridge has not yet been built. That is not a pretty picture to imagine.

Spending all of what you earn or more than what you earn cannot go on unabated forever. It doesn't work like that. Yet that is exactly what so many people are doing.

Buy now and pay whenever seems to be the mentality, particularly among young people. Cell phones, motor vehicles, large TV's, electronic gadgets and clothes seem to be the main things that they spend their money on. Most of this debt is racked up on expensive credit cards.

Failing to set aside money for the future is not only irresponsible, it is downright foolish. Eventually, as the saying goes, the piper has to be paid.

Banks, finance companies and loan sharks will think nothing of bankrupting anyone who gets into a position where they are unable to repay credit cards and loans. They are absolutely mercenary. They will stop at NOTHING to claw and gouge their money back.

Once a person is declared bankrupt all sorts of restrictions are imposed. Those restrictions last for years and years before they are lifted - IF they are lifted. In fact, the stigma attached to bankruptcy lasts for life.

So many companies, including banks, finance providers and insurance companies ask the question:

"Have you EVER been declared bankrupt?"

And they ask it in big bold letters just like I did above. They make it so that you cannot possibly fail to see it. There is a reason for that.

If you answer yes then there is every chance that higher interest rates will apply to you because you are assessed as a higher risk. That, of course, is assuming that you will be able to obtain what you are seeking. You may just be denied outright.

If you answer dishonestly then you will be committing fraud which is illegal. You will be penalized by the Court system and for this you will probably be fined.

You must AVOID bankruptcy. It may seem like a convenient way of dismissing all your debts and starting afresh. It is NOT!