Financial hardship has become the “norm” for the average American. At the time of this writing, Tennessee ranks number one in the nation for bankruptcies. One out of every five Tennesseans are filing for bankruptcy—a staggering statistic that deserves serious reflection.
But is bankruptcy the only solution to our financial problems? Or is it just a quick fix that treats symptoms instead of root causes? Bankruptcy may provide immediate relief, but it often comes at a long-term cost. Our goal is not to offer a bandage but to guide you toward lasting healing—by identifying the root issues, addressing them, and creating a sustainable plan. You didn’t get into debt overnight, and you won’t get out overnight either.
Before considering bankruptcy, carefully weigh the consequences. A Chapter 7 bankruptcy, which wipes out most debts except taxes and student loans, stays on your credit report for 10 to 14 years. During that time, you may face difficulty securing a car loan, opening a checking account, buying life insurance, or even finding employment. You might be treated like a second-class citizen, as I once was.
Even a Chapter 13 bankruptcy—which sets up a repayment plan—remains on your credit for seven years. Negative credit history can affect your ability to rent housing, purchase furniture on credit, or finance even basic necessities. In such a climate, cash becomes critical. I’ve known people who, after wiping out their debts through bankruptcy, still didn’t have enough left to save. That’s why saving must become a non-negotiable priority: Save first. Live on the rest.
You should also review your credit reports annually. Mistakes are common, and you have the legal right to dispute and correct inaccurate information. If you’ve been denied credit within the past 30 days, you can request a free report from each of the three major credit bureaus.
Consulting a trusted accountant or attorney is essential before filing for bankruptcy. Laws change, and what once seemed like a solution may now create more problems. Seek out reputable nonprofit organizations that specialize in helping people reduce their debt without resorting to bankruptcy.
But what really happened? Why are so many Americans deep in debt, despite having jobs, families, homes, and even church involvement? Simply put: They didn’t plan to fail—they just failed to plan.
Insurance statistics show that less than 3% of Americans are financially secure enough to retire at 65. Most retire in poverty, with 87% of seniors living on less than $10,000 a year. Time slips away, and before we know it, we’re facing retirement unprepared.
So, what can we do? Develop a plan—today. My mother used to say, "It’s not how much you make, it’s how much you keep." Financial stress affects people in all income brackets—from $10,000 to $200,000 per year. It’s not about income; it’s about discipline and direction.
To build a house, you need blueprints. To rebuild your financial life, you need a plan. Are we trying to get out of debt just to fall back into it? God forbid. This journey takes time. You may feel overwhelmed, but Jesus said:
“If thou canst believe, all things are possible to him that believeth.” (Mark 9:23)
And again:
“Have faith in God... whosoever shall say unto this mountain, Be thou removed... and shall not doubt... shall have whatsoever he saith.” (Mark 11:22-26)
If your blueprint includes faith in God, He will help you overcome any mountain, including financial ruin. Your plan should be written, specific, and actionable. Stick to it.
Write down three actions you can take this week toward financial freedom:
12 Steps to Financial Freedom
Recognize that you belong to God. You are not your own—you are bought with a price. Give at least 10% of your time each day to prayer and the study of God’s Word. Write down your prayer requests and celebrate answered prayers.
Stand in faith. Believe God’s promises. Don’t let fear override your faith. The world says, “Seeing is believing,” but faith believes before it sees.
Sow in faith. Like planting a seed, trust that your financial discipline will yield a harvest—30, 60, or 100 times over—in God’s timing.
Tithe. Return 10% of your income to God. Whether it’s from your gross or net income, make tithing a priority. When you tithe, you’re acknowledging God’s ownership and inviting His blessing. Not tithing blocks blessings.
Pay yourself next. Build an emergency fund. Dave Ramsey recommends starting with $1,000. Save what you can—$5, $10, $50. Just start.
Prepare for emergencies. Once your emergency fund is set, shift those savings toward paying off your smallest debt.
Use the debt snowball method. Pay off your smallest debt first. Then apply that payment amount to the next debt. Repeat the process until you’re debt-free.
Create and follow a budget. Know where your money is going. Track every dollar. Adjust spending habits accordingly.
Live within your means. Delay gratification. Avoid new debt. Be content with what you have.
Educate yourself financially. Read books, attend classes, and seek wise counsel. Financial knowledge is power.
Teach your family. Instill sound financial principles in your children. Model discipline and stewardship.
Stay accountable. Share your plan with someone you trust. Review it regularly and make adjustments as needed.
God is faithful. Trust Him. Commit your plan to Him. Stay disciplined, and watch the mountains move.
NOTE: An 8-1/2" x 11" PDF copy of my MONTHLY INCOME AND EXPENSE PLANNING Sheet is available upon request through my CONTACT US box on the right sidebar of this blog.
