Living 'far above' your means

DEAR HARRY: I'm living from paycheck to paycheck. I got hooked for a while on payday loans. I've even gone for credit counseling. Now I'm up to my limit on three credit cards and considering those nasty payday loans again. My attempt to get a consolidation loan dropped like a lead balloon.

My friends told me that bankruptcy might be the way to go, but my family is firmly opposed to it. I realize now that I am living too much above my means, and we have started to cut back on luxuries like trips to the Shore (and casinos). Please help me get back on my feet, Harry. Is bankruptcy the way out?

WHAT HARRY SAYS: You have finally taken that first step: realizing that you're living beyond your means. I don't like your using the words "too much." This implies that living a little beyond your means is OK. It isn't. The only way to get ahead is to live beneath your means!

It appears that you really have tried everything except cutting back, and it's too late for that to help now.

There are two different shots in bankruptcy: Chapter 7 gets you out of debt (with some exceptions) and gives you a fresh start. Chapter 13 gives you a five-year payout with possible modification of some of your debts. You need a lawyer whose specialty is bankruptcy to guide you through this.

More than that, you must learn to live beneath your means at all times.