Personal bankruptcy. Yes, bankruptcy is an option for some consumers, especially if there are absolutely no way you can pay off your debt. The U.S. Constitution empowers Americans with the right to discharge their debt, and it is a choice some must take in order to keep creditors away. With medical expenses climbing, fuel prices passing $3 per gallon, and food prices surging, bankruptcy could be your only alternative to help guard your remaining assets from difficult creditors. The bankruptcy court will determine a debt reduction plan which may include discharging your debt through bankruptcy.

Loan Consolidation. Before declaring bankruptcy, consider lumping all of your outstanding loans into one low monthly payment. Loan consolidators can help you come up with a plan to pay off all of your obligations while maintaining your creditworthiness. A home equity loan is one way to go about doing this, but you are putting your home at risk should you default on payments. In addition, a bankruptcy judgment ruins your credit while a consolidation loan may help you rescue it.

Cash In Your Life Insurance Policy. Your life insurance policy may have cash value, therefore consider taking the cash from the policy and using it to pay off or lower your debt. Remember, whatever you take now will not be available to your heirs later.

Government Loans. Local, state, and federal loan support may be accessible to you and at a rate much lower than what your creditors cost. Examine loan programs, which must be repaid, as well as grants – which are considered as gifts to you – to see what you are entitled to accept.

Borrow From Your 401(k). If your company has a 401(k) or 403(b) plan, you can take out a low rate interest loan and use these funds to pay off your obligations. Just remember you are borrowing from your retirement account so you will need to pay it all back or risk IRS penalties.

Of course, some of these options are much less attractive than others, but when your choices are limited, then examining what you have before you is imperative to helping your regain your peace of mind.

Virtually all consumers will have a credit card at some point in their lives. Is this an understatement? Probably, as most consumers carry multiple credit cards. Selecting a credit card should not be something taken lightly; card companies are constantly looking for new consumers, but only after wisely comparing offers should you select a provider. Pick a company that will give to you a reasonable rate and one that “incentivizes” their program with some type of reward for using their card.

So, how do rewards cards work? Almost without fail, rewards cards typically give consumers money back on their purchases [usually 1-2%] or allow you to accumulate points toward prizes or discounts on future purchases. If you charge $10,000. per year [not hard to do if you charge your groceries] and your rewards card pays you a 2% reward on purchases, you will receive $200. from the company. Usually you will gain the funds in the form of several credits to your account spread out over the course of a year, but in some cases you will receive the rewards in the form of a check.

Rewards cards are free money, right? Only if you do not have to pay an annual fee and you pay your credit card off every month. If you do not pay your card off every month, your reward could easily be overshadowed by monthly interest payments, especially if your interest rate is high. Not too many companies pay rewards and give you a low rate at the same time. In theory, even if you carry balances for as little as 2-3 months before paying your card off you could find your rewards for the entire year outweighed by finance charges.

When rewards are given in the form of points that you later can redeem for prizes or take discounts on future purchases, you need to consider the following when selecting your card:

1. Is the reward program for something you know you will use? For example, if you are a member of GM’s rewards program, are you certain that you will be purchasing a GM product in the future? If so, go with this card as the return can be as high as 5%.

2. Is there an annual cap on purchases? Many rewards cards will limit to you the amount of cash back funds or rewards points you can accumulate in one year. Most people never come close to the figure, but if you are a business traveler you can quickly approach and pass these limitations within the year.

3. Do points eventually drop off? The majority of rewards cards only allow you to accumulate points for three years before they begin to drop off. If your next car purchase is five years away and you have a program that drops off points, you could find the first two years of card usage to be a waste as those points would vanish. If you still want that particular rewards card, only use it in years 3, 4, and 5 so that when it comes time to purchase your new car you will not have lost any points. You could consider getting and using another rewards card for a different rewards system to cover years 1 and 2.

All in all, rewards cards can be a useful option for the savvy consumer. Remember, points do fall off and carrying balances from month to month will wipe out the value of the card in short order. By showing plenty of discipline you can make rewards cards work well for you.

Matt Keegan is a freelance writer who resides in North Carolina, USA. Matt writes on a variety of subjections related to business, travel, and Christian themes.

If you are in debt, well over your head in debt that is, there are options to help you overcome this situation. Let’s examine five possible responses and uncover which ones lead to true debt relief.

1. Declare bankruptcy. Not as easy as it used to be especially since Congress passed and the president signed into law legislation to toughen personal bankruptcy laws earlier this year. Still, it is an option for some. Just remember: depending on which course of action you take, Chapter 7 or Chapter 13, it can have a long term impact on your credit standing.

2. Consolidate your debt through a consumer credit counseling service. Be careful as often all these companies do is get your interest rates reduced for a period of time, earn money off of your payments, and sink your credit rating! You can probably negotiate directly with your creditors for relief and save yourself money as well as your good name.

3. Get a consolidation loan. Watch out as this means borrowing from the equity you have in your house [secured credit] to pay off debt that is unsecured. Do you really want to expose your most valuable asset in that way?

4. Debt settlement. Just because you owe $50,000 to creditors does not mean you absolutely must pay it all back. With the services of a company who would arbitrate on your behalf, you can get real debt relief without the stigma of bankruptcy. Yes, your credit would take a bit of a hit but it it isn’t the same as bankruptcy. You could then get out from under the remaining debt over a period of time.

5. Sit on it. In other words: do not do a thing. Sure, it is an appealing option for some but you cannot run and you cannot hide. Better to choose one of the first four options than this one!

Debt relief is possible, but it requires determination and research on your part. If you are using the services of another company to help you gain debt relief, make sure you read the small print and check out their references. Ultimately, your credit standing is in your hands. Do not trust it to those who are not actively working on your behalf.

Matt Keegan is The Article Writer who writes about topics from Aviation to Zoos. For samples of some of his work, please visit http://www.thearticlewriter.com

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