Some people will tell you that the best way to avoid financial trouble and bankruptcy is to have no debt at all. In some situations, this can absolutely be true. If you are overly stressed out about owing money, health complications can even become an issue, and you can see that owing nothing is the best path.

However, the reality is that life often requires debt, and that’s not always a bad thing. For example, if you get a job making $100,000 per year, you can clearly afford to have a mortgage. However, in most housing markets, you won’t have enough money to buy a home for months, if not the entire year. It makes more sense to buy a house with a mortgage, thereby taking on debt, than to try to avoid debt.

The alternative, some will say, is to rent. Again, this can work in some situations, but it’s often not the best choice. The problem is that, while rent is not “debt” in the same way that a mortgage is, you still have to pay it every month, and it’s gone when your lease ends. Doesn’t it make more sense to pay toward a mortgage so that you actually own something when you’re finished?

A good rule of thumb, experts say, is to have debt that is under 36 percent of what you make. At $100,000 per year, that would mean $36,000 of debt at the most, or $3,000 every month.

If you do have too much debt, well exceeding this 36 percent rule and pushing you toward bankruptcy, take a moment to look into your legal options in Tennessee.

Source: Credit.com, “How Much Debt Is OK?,” AJ Smith, Oct. 21, 2015