Thursday, December 29, 2011

Bankruptcy and Credit Card Consolidation as a Solution

It is a fact of life that sometimes circumstances contrive to snow you under and make you feel overwhelmed by your financial state. These unseen and massive expenses could be anything from sudden unemployment to ill medical health to plain frivolous spending. Whatever your case may be, the simplest piece of advice anyone can give you is to close up that wallet and tighten your spending even if you want to spend money on whatever it is your heart fancies. Most people that file for bankruptcy are stricken by poor fiscal management, their problems compounded either by poor saving habits or by their free-spending ways. But why live beyond your means at all because bankruptcy, or being close to it, demands an immediate lifestyle change.

One of the simplest ways to get through your personal financial crisis is to budget everything the way one might ration food. Keep a track of your spending and you will suddenly see things that are unnecessary and can easily be done away with. And above all, cut your credit cards out of your life. If you feel that you won't be able to resist temptation at all, cut those credit cards quite literally and begin to pay only for what you can buy in cash. This is a sure-fire way of curbing a lifestyle that is lavish beyond your means. A good idea if you do want to hold on to that credit card at all is to put something on your card only if you know that you have the money is in your account to pay off the credit card bill. Use that credit card as a convenience, not a luxury.

Inevitably, when someone talks about spending money and curtailing it, debt consolidation comes up as a suggestion for those with debt management issues. If you have a credit card that weighs you down, the solution generally takes on the form of credit card consolidation. This means you take all of that debt and lump it on one loan which is generally of a lower rate so that you're only paying off the one debt and you don't have to miss or juggle any payment dates. On the looks of it, the idea is a winner, but when you come to think of it, it's not really all that it's made out to be. Once the debt is consolidated, many people no longer feel the pinch of having to make repayments to anyone and everyone that comes knocking on their door and this leads to a certain laxity.

This can lead to a spending spree, and you know what that will mean. After being lulled into a false state of security, said person falls into the credit card debt trap once again. Credit card debt Consolidation is a temporary solution and not the full-time fix many make it out to be. To pull this off you need a certain financial savvy and a sense of restraint that many people don't have. Ironically, if that sense of restraint was there in the first place credit card consolidation would not be needed. So while credit card consolidation is an excellent option to solve your financial woes, be aware that it is not a perfect alternative to filing for personal bankruptcy. The best way to beat bankruptcy is a sense of discipline and loads of common sense. Keep those close at hand and your debt woes could soon be a thing of yesterday.

1 comment:

Real Estate Yogi said...

Before you make a decision make sure you have all the answer to your bankruptcy questions. It's not as easy as you think and it won't necessarily solve your problem.