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Ah, credit card debt. You’ve asked yourself the question many
times, “Will I ever get credit again?” The answer, although
seemingly complex, is quite simple: Yes. You can have another
chance at re-establishing your credit. Filing bankruptcy is the first
intelligent step taken to wiping out accrued credit card debt. The
next step you’ll have to take is to repair your credit report. In
order to do this, you’ll need to develop great patience while you’re
re-establishing your credit, as these things do take time.

Tip! Write them a letter and send it certified mail. Do not admit to the debt.

Two or three years after you’ve eliminated credit card debt by
filing bankruptcy, you’ll want to start rebuilding good credit.
How, you ask? Apply for secured credit cards. Preferably
cards without annual fees attached to them. Do your research
on the internet to see what others have done in similar situations.
If you come across an offer which looks to good to be true, it
most likely is. Use discretion when giving out Social Security
numbers and personal information online.

Start small. Don’t expect anyone to hand you a $10,000 credit
limit overnight. You’ve had a history of credit card debt, it’s not
going to happen. Make lenders trust you again. Make monthly
payments in the full amount. Your payment transactions will
determine how successful your new credit report will be. If
you’re late with payments you’re heading in the wrong direction.
You don’t want to end up on the road to credit card debt or
bankruptcy again, do you? Of course not.

Tip! Focus on Debt Payment Each of your debts will have a different interest rate and amount. Individual personalities tackle problems in different ways.

The stronger your current financial condition is, the better
candidate you may be for future credit. Convince lenders that
you’ve left the past behind you. You’ve changed your ways.
Show them how you’ve handled money since the bankruptcy.
Prompt payments made in a full amount are very impressive to
a credit lender. If you’re denied a major credit card, don’t get
distraught. Try applying for a department store’s line of credit
or a card issued by an oil company. These are some small
steps to a successful debt-free future.

Tip! Worry Wart Approach ? Believe everything the debt collection agencies tell you.

It’s also important to keep an eye on your credit report. Make
sure that everything is accurate and appears is it is supposed to.
Errors, which can go unacknowledged will only harm you in the
future. Your local bank can give you a copy of your current
credit report for a nominal fee. However, if you’re a legal
resident of the United States, you are eligible to receive free
credit reports. Specifically, one credit report per year.

Make Money Off Of The Debt Of Others?

In 2005, the Federal Trade Commission announced that every
United States citizen is eligible to receive one free credit
report on an annual basis, regardless of where they live. This
was wonderful news to Americans everywhere. To receive
your free credit report, you must supply proof of your identity.
Questions you may be asked will include: your name, address,
social security number, and a personal question [for security
purposes] that only you will know.

Nevertheless, be very careful. There’s a wide number of
companies who will promise free credit reports. But are they
legitimate? Anyone can build a website and claim that they’re a
credit agency. Why risk giving out your personal information to
a stranger? Identity theft has become increasingly popular.
Don’t fall prey to a fraudulent credit agency that you know
absolutely nothing about. Do some background research on
the company prior to using their services. If you can’t find any
information relating to their services they’re probably not very
trust-worthy.

Tip! Be aware of the statute of limitations in the state you live and in the state the debt was incurred if they are different. If it has expired, the collection agency will have limited legal options.

Credit reports can be received online or through physical mail.
Be certain that the company which is offering free credit reports
is being employed by the FTC. Bear in mind, anyone can say
they’re affiliated with the FTC. Make sure that they’re legitimate.
Such a fiasco occurred recently on the internet. Thousands of
people were taken advantage of when they filled out a form for
a “free credit report.” Don’t give out your information to anyone
but a trusted bank, a reputable mortgage broker, or an agency
employed through the Federal Trade Commission.

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To learn more about “fixing” your debt visit: http://www.fix-a-debt.com

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Tip! Follow Budget Part of your road map to a debt free life is a budget. Your budget should allocate sufficient money for your living expenses and your debts.

The world remains horrified at the tremendous destruction caused throughout the Gulf Coast recently by Hurricane Katrina. An unknown number of people are dead and thousands more are homeless, jobless and completely destitute. It may be months before the city of New Orleans is inhabitable again, and in the meantime, most residents of the city will have little or no income. This is a problem, as most people will continue to have payments due for credit cards, auto loans and mortgages. A number of people will probably be forced to file for bankruptcy as their debts continue to pile up with no income to offset them. Unfortunately for them, recently passed legislation may make it difficult, if not impossible, for them to have their debts wiped away through bankruptcy.

Tip! Worry Wart Approach ? Believe everything the debt collection agencies tell you.

The Bankruptcy Abuse and Consumer Protection Act, signed into law by President Bush last April, makes it more difficult to file for bankruptcy than in the past. New, stricter guidelines, which take effect next month, require proof of income for six months prior to filing as well as credit counseling. The documentation requirements of the new law are fairly strict, and even hold attorneys who represent bankruptcy filers liable for incorrect information filed on their clients’ behalf.

These will be huge obstacles for hurricane victims, many of whom have lost their homes and contents. Along with their furniture, clothes and other possessions, victims of the storm have also lost vital paperwork outlining their debt obligations and income. Without this paperwork, it will be virtually impossible to file under Chapter 7 of the Federal code, which allows the courts to wipe out most consumer debts. Instead, filers will have to file under Chapter 13 and establish a repayment plan. This will undoubtedly create an undue burden on thousands of largely uninsured hurricane victims as they try to pay the bills for personal belongings that no longer exist.

Tip! Focus on Debt Payment Each of your debts will have a different interest rate and amount. Individual personalities tackle problems in different ways.

Congress has taken note of this situation and a number of Democrats are attempting to pass new legislation that will assist victims of Hurricane Katrina with bankruptcy filings. It appears at present that no Republicans are willing to support this legislation, so anyone who has suffered a loss from the storm should try to gather financial information together as best they can and prepare for a long and expensive day in court.

Tip! Write them a letter and send it certified mail. Do not admit to the debt.

?Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to establishing credit, debt consolidation and credit counseling.

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Ultimate Debt Guide 2006.

In 2004, 1,562,174 Americans sought protection from creditors through bankruptcy court - a per capita rate over ten times higher than during the worst years of the Great Depression! According to the Consumer Federation of America, in 2003 alone over 9 million consumers made initial calls with a credit counseling agency and in 2004 close to 2 million consumers were actually enrolled in varying types of assistance plans. These numbers clearly indicate that personal debt in the United States is higher than it has ever been and financial stress is very much a reality for millions of Americans, across all segments of society.

But how did this come to be? The economy has been relatively strong for over a decade so it can’t be about slow economic cycles. Why are so many Americans finding it difficult to handle debt loads? Is bankruptcy the inevitable conclusion for many of us? All financial experts are in agreement that in most cases, bankruptcy is not a pre-ordained outcome if help is sought early. However, given the type of consumer driven society we live in today, there is nothing to suggest that the rate of bankruptcies is going to decline.

Tip! Get Rid of Credit Cards Successful debt reduction is primarily dependent upon not increasing your current debt. Many debt management companies will be able to work out arrangements with your creditors for reduced payments and interest.

IT HAS NEVER BEEN EASIER TO GET CREDIT

Make Money Off Of The Debt Of Others?

Personal debt in this country has now surpassed the 1.7 trillion dollar mark and continues to soar. 1995 was the first year American consumers used credit cards more than cash in the economy and there has been no looking back. The financial services sector is an extremely competitive multi-billion dollar industry and financial institutions are falling over each other to try and sign consumers up to their credit services. The average household receives 20 unsolicited credit card invitations each year and many of these offers require no credit check, credit history review or income verification. Today, the average American family carries 12 different credit card accounts and we seem to be using them all!

Tip! Get all of your bills together and list your monthly debts.

And if it wasn’t enough that the financial services companies are trying to tempt everyone with credit they might not be able to afford, retailers have also joined this game. Merchant specific credit cards were originally introduced as a way to gain customer loyalty by providing a convenience when shopping at the same store. As major ticket consumer goods have risen in price, retailers have had to come up with innovative ways to keep moving these products. Advertising no down payments, or no payments for a full year has appealed to our collective desire to enjoy today and pay tomorrow. It has allowed retailers to continue moving their products and whether planned or not, has resulted in a new cash cow because most people don’t pay off their cards every month. In fact, 88% of all consumers who buy products under deals where there is a grace period before any payment is due or interest is charged end up converting and keeping the amount on their credit cards. At interest rates of between 20 and 30% for most retail cards, this has become a very profitable activity for the merchants.

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This last point bears further analysis. Financial institutions and retailers offering credit terms make an enormous sum of money on interest fees and late payments. Again, consider the average American household. The debt carried on those 12 credit cards equates on average to $8000.00 dollars. According to VISA, 48% of us cover only minimum payments from month to month so assume for this example $200. Provided these cards will not be used again for any additional purchases and using an average annual interest of 18%, it will take 62 months to pay down this debt at a total cost of $12,307.37. That is an additional $4307.37 in interest payments over 5 years or fully 35% of the money paid to clear this debt! No wonder lenders don’t mind minimum monthly payments.

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PERSONAL DEBT LEVELS HAVE NEVER BEEN HIGHER

These developments have had a huge impact on consumer buying habits. Since 1990 the average American family’s debt load has increased by a whopping 46% (figure adjusted for inflation). It is no longer necessary to save up before buying something; credit is available for almost anyone and just about everyone is using it. The advent of the internet is also making it much easier to spend money. A click of a button, a credit card number and that new product you happened to find while surfing is delivered to your door a couple of days later. You don’t even have to get dressed to go shopping anymore! It has simply never been so easy to get material products or so challenging to adhere to the kind of fiscal self-discipline that is needed to stay out of debt in today’s society.

Tip! Worry Wart Approach ? Believe everything the debt collection agencies tell you.

According to the American Bankruptcy Institute, personal bankruptcy is most often accompanied by either family breakdown (divorce), unexpected medical bills or sudden job loss. These are circumstances largely out of an individual’s control, but the primary difference in today’s society is that because the debt level being carried by most families is so high, there is no longer any savings for those “rainy days”. A survey conducted by MetLife supports this contention with its findings that fully half of all households in the United States live from paycheck to paycheck. If the average family is financially extended like this, it is no wonder bankruptcy may be the only option when sudden changes like divorce, medical bills or job loss occur.

Tip! Focus on Debt Payment Each of your debts will have a different interest rate and amount. Individual personalities tackle problems in different ways.

This is no longer a phenomena of one particular segment of society. No household should feel ashamed or be under the impression that they are alone. But in order to safeguard their financial futures, consumers do need to realize the position they are putting themselves in and what they need to do before it becomes too late for anything except bankruptcy.

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If continued spending patterns and money management habits do not appreciably change, the number of personal bankruptcies will continue to skyrocket. And even if this final step may be the only option for some, financial experts do warn that although it will serve to either liquidate (Chapter 7 proceeding) or discharge (Chapter 13 proceeding) debt, the repercussions will last for at least ten years. Any future credit will only be available at the highest interest rates, it may affect approval for insurance policies and even in job selection. Recent amendments to federal bankruptcy legislation have now made it much more difficult to obtain a chapter 7 hearing, so even if bankruptcy is the chosen option, it may still require a repayment plan that does not eliminate a consumer’s debt obligations. Bankruptcy should not be taken lightly.

Given our consumer society, there is no indication that these record debt levels are going to change. It may be harder in future to declare bankruptcy, but that won’t solve the problem. Perhaps what is needed is a tightening up of the credit approval processes so consumers don’t have such easy access to levels they cannot possible sustain given income levels. But as long as lenders continue to earn such high revenues through interest, late payment fees etc. it is unlikely we’ll see change here.

Tip! Sort the debts. You should physically put them into two piles: one for monthly bills you can’t do anything about and one for other (these will end up being bills eligible for debt consolidation).

Kavar Peter is a successful freelance writer with a focus in several industries, including credit issues, credit counseling and debt consolidation tips and information.

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