Bankruptcy is meant to be a last resort for individuals and businesses. Depending upon your tax status and the severity of your debts, there are several different bankruptcy options available… some that are meant to help businesses to restructure, some that are designed to ease the pressure of debt on individuals, and even some that pretty much suspend all of the debt and make you pay it back through the court system. Unless it’s a truly desperate situation, however, bankruptcy shouldn’t even be considered; not only does it drag your debts through the legal system, but most creditors won’t (or in some cases, can’t) touch you until your bankruptcy has been discharged by the court (and many still won’t deal with you for at least 2-3 years afterward.) Additionally, legislation has been passed on several occasions to make bankruptcies more difficult to execute and to make the penalties of bankruptcy more severe in order to prevent people from seeing it as simply an “easy out” from their debts.
So What Options Are Available for Credit?
Good Credit
If you have good credit, then you’re very fortunate. Take care in choosing new lines of credit, because you don’t want anything to mess up your score. Shop around for credit cards, weighing the options and benefits among them; compare interest rates, additional fees, and any perks that the cards might have. In most cases, you should avoid any cards that charge processing fees or monthly and annual fees; with your credit rating, you can almost certainly find a card out there that offers as good or better terms without the fees. Check with your local banks, as they may be able to offer you a better rate than a national competitor. If you’re in the market for a loan or other credit line, shop around at different banks to make sure that you get the lowest rates and the best terms. Doing business with a bank where you have a checking account and a savings account can also have advantages; many banks offer lower rates and more options to customers that they already have dealings with. Don’t let loyalty to one institution cause you to miss out on better terms across town, however.