After the bankruptcy laws were changed in 2005, there was a drop in the number of filings each year.  But that drop was short lived as the declining economy pushes more and more Americans into filing for bankruptcy protection.  The numbers in 2008 were up over 30% from those in 2007.  These frightening statistics are all too real.

The real question now is after filing, how can you recover your financial well-being and get back on track?  First and foremost you are going to have to be patient.  It’s a long but achievable process.

1. Start by applying for a new credit card.  One with the lowest fees and rates you can qualify for.  Remember when you were in college and got your first card?  You were excited even though it was 30%.  That kind of card may be all you can get.  Take it and spend a little bit of money on it and pay it off every month.
2. Keep your debts at a minimum and make every payment on time.  This is critical to rebuilding your credit history.
3. After a year or so, apply for a another credit card with a lower rate and ask that the rate be reduced on the original card now that you’ve proven you make your payments on time.
4. Keep your balances under control.  Do not spend a lot on any cards or loans.  Part of a good FICO score is a low debt to available credit ratio.  Don’t buy anything you can’t afford to pay off in one month.
5. Don’t get sucked into any kind of credit repair scheme.  There is no magic pill to wipe out a bankruptcy.  It takes time and discipline.  The bankruptcy will stay on your credit report for 7-10 years but if you play your cards right, you can start to rebuild your credit before that.

The easiest way to recover from financial distress is to avoid bankruptcy in the first place.  Debt Settlement can often be the optimum solution to helping you avoid the long-term negative effects of a bankruptcy while still providing serious debt relief.  The key to a successful debt settlement program though is to get into the program before you are “bankrupt”.  Sometimes if you wait too long to address the situation, you leave yourself no option but to file. 

If you think you might be headed that direction, contact the consultants at First Rate for a free evaluation to see if debt settlement can help you.

America is a nation in debt. We love to buy and the mass marketers spend millions every year trying to convince us that we need the newest, biggest, and best of whatever it is. They guilt us at Christmas into “keeping the retailers happy". But in the end, not everyone can pay all that debt off.

Studies show the average consumer is exposed to more than 3,000 marketing messages every day. In the last decade, it's been estimated, solicitations jumped from 1.52 billion annually to 4.29 billion.

The credit card companies really don’t care if you ever pay off your cards. In fact, they prefer you don’t. They make billions, yes with a “B” every year on interest. Last year, the credit industry made $43 billion in interest. If you pay that debt off, their income goes away.

Late last year, revolving debt — an estimated 95 percent of it from credit cards — reached a record high of $943.5 billion, according to the Federal Reserve. The annual growth rate of this debt increased steadily in 2007, reaching 9.3 percent in the last quarter, up from 5.4 percent in the first quarter.

The amount of debt that is delinquent — in which minimum payments are late but the accounts are still open — also appears to be on the rise. The Federal Reserve found that 4.34 percent of the credit card portfolios of the 100 largest banks that issue cards was delinquent in the third quarter of last year, up from 4.07 percent in the previous quarter. Charge-offs — accounts closed for nonpayment — also grew in that period, and banks expect charge offs to continue rising in 2008.