Filing for bankruptcy is an extreme move, not a quick fix. It’s a long, painful process with a huge stigma, and you’re unlikely to be able to get any kind of credit for ten years afterwards. Yet bankruptcies are on the rise. Out of ignorance or stupidity, more and more people seem to be using bankruptcy as a first option, instead of a last resort. Before you do it, make sure you’ve considered every alternative.

Have You Reorganised Your Debt?

If you haven’t tried debt consolidation or negotiation, you really should. Yes, you’ll have to pay back your debts eventually, but surely that’s better than bankruptcy, isn’t it?

Sell Everything You Can.

It’s better to sell everything you own than it is to go into bankruptcy. Move to a smaller house. Sell your cars and take the bus. Take a good, hard look at your life, and realise that there are very few true ‘basics’: you can do without almost everything. Your house is probably full of quite valuable things that you never use, so bite the bullet and get rid of them. In short, subtract your debt payments from your income, and live like someone who earns that much.

You are going to lose almost everything you own if you declare bankruptcy, so you might as well try to sell it yourself at a better price and avoid the bankruptcy issue altogether.

Work More.

If you can get extra hours, do it. Being bankrupt is such an indignity that you should at least try going to your boss and asking for a pay rise or promotion. After all, the worst they can do is say no. They’re going to find out about it anyway if you declare bankruptcy, and they might wonder why you didn’t come and ask for their help. Also, if you’re married and only one of you works, try to get the other a job – you never know, it might even be fun!

Use the Power of Threats.

One of the best things to do when you’re considering bankruptcy is to write a letter to absolutely everyone you owe money to, letting them know. Make it a very clear threat: “if I cannot find a way of paying my debts then I will be forced to file for bankruptcy”. Most creditors would rather let you pay back a tiny fraction of what you owe than have to try to get money out of a bankrupt.

Know Your Local Laws.

Bankruptcy laws vary enormously depending on where you are. There are some places where you’ll be forced to give up everything you own to pay your creditors, some places where you at least get to keep your house, and some where you can declare yourself bankrupt and not even notice! Try to get a lawyer – you might think that you can’t afford one, but many will work ‘pro bono’ (for free) for people who really need a lawyer but can’t pay.

There are many online debt consolidation services and it is important to find the right one for your particular situation. Remember that using any debt consolidation services including an online debt consolidation service can affect your credit rating adversely. If you have a good credit rating them you should try to find an alternative solution to your financial problems instead of using an online debt consolidation service.

Before you begin looking for any online debt consolidation companies it is worth considering the Debt Zapper program from the Bank Card Holders of America. They can prepare a personalized pay-off schedule to help pay off credit cards in the fastest, least expensive way possible for as little as $15. You will not find any debt consolidation program that can give you a service for anywhere near that small amount. It is worth paying to have the plan done, just to see if you can keep to the schedule and avoid using a debt consolidation program.

One of the most important pieces of advice when you are looking for an online debt consolidation company is to check whether they are licensed. This is because not all states require licensing for online debt consolidation agencies. Maryland and Florida are two such states and any online debt consolidation that has their registered postal address in those states should be avoided. On the other hand, there are some states that have licensed credit counselors so it is worth seeing if the online debt consolidation company has any licensed credit counselors.

By far the best online debt consolidation service is Consumer Credit Counseling as they are the least harmful to you and your credit. It is worth checking the free information on their website as it has some useful advice. Their website address can be found through any search engine. Consumer Credit Counseling is not just an online debt consolidation service, they also have local offices to enable you to deal with them face-to-face if you prefer, or a mixture of both. Finding an online debt consolidation company that has local companies is also a good idea because the local authorities have jurisdiction them.

It is important to check if any online debt consolidation company you are considering signing up with is in good standing with the Better Business Bureau. This is a good way of checking if there have been any complaints made against a particular online debt consolidation agency before you take out an agreement with them and regret it later.

Are you one of those people who only ever got a credit card for the convenience of being able to pay without cash, or because you weren’t aware of any other easy way to borrow money? Millions of us are, thanks to the unavoidable advertising of the credit card industry, and few people realise just how many alternatives to credit cards there are. Let’s take a look at a few.

Debit Cards.

Debit cards are often used in many European countries, but are relatively unheard of elsewhere. Basically, they’re just like credit cards and are accepted everywhere credit cards are accepted – the only difference is that they take any money you spend directly from your bank account, instead of you getting a bill at the end of the month. You should be aware, though, that you aren’t as well-protected from fraud with a debit card as you would be with a credit card.

Pre-Paid Credit Cards.

These are cards that work just like credit cards, except that you can’t have a negative balance – you have to put money on the card before you can spend it. That means that you ‘top-up’ the card, like you would a mobile phone. This is good if you want to know how much you’re spending, not to mention that you can even give the cards to children. They’re also safer than debit cards, since someone who stole the card could only spend whatever money was on it at the time.

Bank Overdrafts.

A good bank overdraft, used together with a credit card, can be a far better way of borrowing money than using a credit card. Your overdraft limit is set by the bank according to how much you gets paid into your account each month, and you don’t need to pay it off until you want to.

Basically, it just gives your account the facility to go into minus numbers, if you want it to. Many banks charge relatively high interest rates for overdrafts, but rarely as high as a credit card – and they will give much better rates for good customers.

Real Loans.

When you’re buying one big thing at a fixed price (like a car), or you’re going to spend all the money on one type of thing (home improvements, for example), it’s worth budgeting it all out and going to a bank or another loan company. They’ll be able to lend you the money at a much better rate than a credit card would, simply because they know why you’re taking the loan and can set regular monthly payments for you to repay it.

Credit Unions.

Credit unions are like banks, only more local. They are co-operative, owned by their members and run by the community, and are a great place to borrow money. This is because there are limits in law on how much interest credit unions can charge, and they don’t need to make a profit for owners or shareholders, because they don’t have any. It’s well worth checking if there’s one in your area.

A bad credit credit card

“Bad credit card card” is used to refer to credit cards that can be obtained even with a bad credit rating. The bad credit card cards provide opportunity to people (with bad credit rating) to improve their credit rating. In that sense, bad credit credit cards act as rescuer for such people. So, bad credit credit cards also act as necessary a training ground for people who have not been able to control their spending urge in the past.

Bad credit card cards are commonly known as secured credit cards. The bad credit card card (or secured credit cards) requires the individual to open up an account with the credit card supplier and maintain some cash balance in the account. Why is that required? Well, credit cards are a business for the credit card suppliers; so how can they trust someone who has defaulted on his/her payments in the past? After all, a business is about profits and such risks are a threat to profits. The bank or the credit card supplier will generally pay interest on the balance in your account. However, it’s best to check this with the bad credit card card supplier/bank. The credit limit on the bad credit card card is determined by the cash balance in the account and is generally between 50-100% of the cash balance. These bad credit card cards are also referred to as debit cards, owing to the fact that they work less in a credit-giving manner and more in a debit-giving manner.

There are plenty of bad credit card cards available in the market. When searching for the bad credit card card that is best suited to you, you should consider 4 things in particular: the minimum balance that you are required to maintain in the bank account, the credit limit that you will receive (i.e. the percentage of your bank account balance that you are allowed to spend on your bad credit card card), the fees/other-charges applicable to the procurement of bad credit card card and the rate of interest that you will receive on the balance in your bank account. An ideal bad credit card card would have no fee/other-charges associated with it and would require zero or a very small amount as minimum bank balance. It would also have something like 90-100% of bank balance as its credit limit. Moreover, an ideal bad credit card card would also offer a good interest rate on the bank balance.

Bad credit card cards are really a good concept that provides respite to people with bad credit rating by letting them enjoy the benefits of credit cards while they mend their credit rating.

‘Bad debt credit card’- what’s that?

Bad debt credit card is basically a credit card that the credit card suppliers offer to the people who have bad debt. Did that astonish you? Well, don’t let your thoughts run just yet.

You can classify bad debt credit cards into 2 categories based on what you understand by bad debt credit card. The first category of bad debt credit cards is those credit cards that are secured (and are also known as secured credit cards). These bad debt credit cards require a security i.e. you have to open (and maintain) a bank account with the bad debt credit card supplier. The credit limit on your bad debt credit card is calculated as a percentage of the balance you hold in the bank account you have opened with bad debt credit card supplier. Generally, this is 50-100% of your bank account balance. So, this bad debt credit card enables you to spend the amount you hold in your bank account; only the way you spend it changes (i.e. instead of spending that as cash you spend it using your bad debt credit card). So bad debt credit card lets you enjoy the convenience and other benefits that are associated with credit cards, even with a bad debt. This security is as such important for the bad debt credit card supplier; after all how can you trust someone who has a bad credit rating.

The other category of bad debt credit cards are nothing unusual, they are the same cards that we know of most commonly; the only difference is in the way you get them and the objective behind getting them. Here, we are talking about the credit cards that you use as a debt consolidation mechanism i.e. consolidating bad debt (as such any debt is bad). So we can call them bad debt credit cards too. These operate by transferring of the balance you owe on your current, high interest credit cards to these bad debt credit cards that have a lower APR (at least for some initial period). Hence, these bad debt credit cards help you in consolidating your debt and getting some relief from the higher APR that you were experiencing on your current card.

Some people accept both of the above categories of credit cards as bad debt credit cards while others tend to go with one or the other. So, what you regard as a bad debt credit card is really a matter of personal choice.