Should You Avoid Bankruptcy?

Debt is rising in this country faster than ever before, both for our government as well as for many hardworking individuals and of course the newly jobless.

The question is Should You File For Bankruptcy to get rid of your unsecured debt? The answer is no, except in very extreme cases. Why is bankruptcy so bad? Bankruptcy follows you for 10 years and you still may be liable for some debts. Here's what filing bankruptcy could mean for you:

Bankruptcy could keep you from getting a job.

Everyone looks at your credit report these days. Potential employers want to know how you handle your money. Especially in any job where you might have access to merchandise or handling money, an employer wants to hire someone who shows they know how to handle money well. A bankruptcy is a red flag to an employer that the potential new employee may pose a risk. In today's job market, the competition for the jobs is at a high. As a result, a bankruptcy will most likely kill your chances.

With a Bankruptcy, getting any loan is nearly impossible.

Shark Tank is a new television show I find very interesting. Five multi-millionaires listen to average Joe's ideas and decide if they want to invest in them and their product. A gentleman was on the show recently with a good idea. He told the Sharks he was coming to them for money because he had a bankruptcy on his record and could not get a business loan. One of the Millionaire Sharks immediately responded "You are radioactive, I wouldn't invest in you because you will never get a business loan".

Unfortunately, the Shark was right. He may have had a good idea, but for 10 years no one will be willing to loan him money for the many reasons a business needs continuous access to cash.

The first thing any lender looks at is your credit report. If you have a bankruptcy, not only are you not going to get a business loan, you are going to have a hard time getting a loan for a home or a car and the list goes on.

Higher Credit Card Interest Rates

Credit card companies are going to charge you the highest rate allowable by law, if they give you a credit card at all. In some areas, you could pay as much as 25 percent.

I'm sure at this point, you get the message. Avoid bankruptcy if at all possible.

So what can you do?

The first thing you should try is to contact those you owe and try to work out a payment plan. If that doesn't work, try a credit counseling or debt consolidation service to get debt relief. The goal of debt relief is to reduce or eliminate the late fees, penalties and interest so you can reduce your monthly payments and pay off your debt quicker. Depending on the service you go with, your credit may not be impacted at all, or with debt consolidators, the effect may last just 3 years instead of the 10 years with bankruptcy. A much better choice.

When choosing a debt relief or debt consolidation company, pick a company that is a member of the better business bureau.

We have looked at several debt consolidation companies and chose one that is highly rated by the Better Business Bureau. They truly care about you and can give you the best of Debt Relief.

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What you Need to Know About

The Credit Card Reform Act

There are two parts of the Credit Card Reform Act. The first part will give consumers more notice when contracts are changed and the option to reject interest rate increases. The second part locks in interest rates for 5 years on current debt. See how this will affect you.

Consumers struggling with credit card debt will begin to see some relief since the first part of the Obama administration's credit card industry overhaul went into effect.

Starting August 20, credit card issuers are now required to give customers 45 days advance notice before making any significant changes to their contract. Plus, they are required to mail bills 21 days before the due date. Older laws required 30 days notice for changes and bills mailed 14 days in advance.

Consumers have the right to reject changes to their contracts, including interest rate increases, and they have the option of paying off their balances at their existing rates within five years.

The changes are the first to come under the Obama administration's credit card reform act, which was signed into law in May.

"The new rules of the road established by the Credit CARD Act will shield credit cardholders from widespread abusive practices," Senate Banking Committee Chairman Chris Dodd, D-Conn., the bill's author, said in a Wednesday statement.

More substantial changes are expected in February 2010, when the second half of the act is implemented.

These reforms are "a good thing" for consumers, said Linda Sherry, director of national priorities at Consumer Action, a non-profit consumer advocacy group. "But they are just the icing on cake. The cake is coming in February."

In February, credit card companies will be prohibited from raising interest rates on existing balances unless the borrower is more than 60 days delinquent or the increase is stated in the contract.

"That's a very big deal for household budgets," said Gail Hillebrand, senior attorney at Consumers Union. "It means the rate can't go up on money they've already borrowed."

Among other measures to come in February: Consumers under the age of 21 will be required to have a cosigner and will have restricted credit limits; credit card issuers will not be able to raise interest rates in the first year unless specified in the contract; and issuers will be required to give more advance notice before raising rates on future purchases.

The changes requiring companies to mail bills seven more days in advance is expected to make it easier for consumers to pay their monthly installments on time and avoid penalties for being late.

Rejecting changes to the terms of a contract could come at a price.

While consumers will now have the right to reject an interest rate increase and cancel their cards, the new rules stipulate that the cardholder will have five years to repay their balance at the current interest rate.

That could result in a much higher minimum payment, since the amount of time to repay the debt will be shorter. Under the new rules, the minimum balance cannot go up by more than double.

If the balance is too large to be repaid within five years without more than doubling the minimum payment, it's up to the credit card company to extend the time or determine a new rate.

Get Your Rates Reduced Before They are Locked In

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Get up to $550 Next Business Day! ------------------------------------------------------------------------------------------- What you Need to Know About

The Credit Card Reform Act

Get Your Rates Reduced Before They are Locked In

Need Money Fast?

Get up to $550 Next Business Day!

Get up to $550 Next Business Day!
-------------------------------------------------------------------------------------------

What you Need to Know About