Karen Blumenthal recently published an article in the Wall Street Journal entitled, New Ways Bankers are Spying on You, which discusses how in these difficult economic times, banks are doing much more than simply looking at your credit score when deciding whether or not you are worth lending to.

This brings to mind the client who comes to my office and tells me that even though they are hopelessly in debt, they are worried about filing a bankruptcy because their credit score is still high. I always remind these clients that your credit score is supposed to be one of many barometers of your financial health, not an absolute indication of financial health. Unfortunately, many people are encouraged to misuse credit based upon the erroneous assumption that all is well because their credit score is still above 700, and they slowly fall into financial hardship.

The definition of financial health includes living within a budget, controlling debt, using credit responsibly, working towards short and long-term financial goals, and saving. It is challenging to manage any of these things when you are struggling to make minimum payments on your monthly obligations.

The federal bankruptcy laws provide a solution for those who are overwhelmed with debt. Bankruptcy can restructure or eliminate certain debts while protecting assets like your car, your home, and your 401(k). If you have more debt than you can handle, and feel like you aren’t getting ahead, don’t be fooled by a high credit score. It might be time to consult with one of the experienced attorneys at Miller and Miller, who can advise you of your options on how to get back on the road to financial health.