Many people think that filing bankruptcy is an easy way to solve all their debt and credit related problems. Many people do not realize that debt can so easily be fixed and they can enjoy good credit again. There are several ways to resolve the problem that do not involve a step as drastic as bankruptcy. Keep in mind that if you follow through and file for bankruptcy, this will be a hugely obvious detriment that will appear on your credit report and affect your credit score for the next seven years or longer. There are very few lenders who will approve a loan for someone who has declared bankruptcy within the past two years, and if they do, the interest rate will likely be as high as federal law will allow.

Avoiding bankruptcy and rebuilding your credit is possible with a very simple plan. Some credit card companies offer easy approvals. But at the same time, additional credit card debt creates a lot of unnecessary burdens, and isn’t that a big part of what got you where you are now? The credit card companies that offer easy approvals will usually charge a very high interest rate, because they realize they are “taking a chance” on you that you will repay this debt.

If you have a basic problem of having more financial obligations that you have revenue coming in, either in business or from a personal perspective, taking on more credit card debt is not going to solve the problem. It may delay getting the problem resolved for now, but it is really like the old saying of “robbing from Peter to pay Paul”, and could get you into even worse shape than you currently are.

Many plans can let you get your hands on loans that have low interest rates. In return, the creditors freeze interest on the debt, agree not to contact the debtor while the plan is in place and write off a portion on the debt. It is all too easy to run up huge bills when you are charged high rates of interest on your un-paid debt. The reason that many creditors are willing to do this is that they understand that if they allow you to be charged a lower rate of interest, your total debt picture may allow you to repay your account with them, whereas if you declare bankruptcy, chances are good that they will only get pennies on the dollar.

Sometimes a creditor will allow you to make “interest only” payments. While we all know that this is just money going out the window because it does not have any effect on reducing the principal amount owed, it may allow you some “breathing room” while you are getting things squared away.

You will want to keep an eye on your credit report. There are likely errors on your credit report, which may impact your ability to negotiate with a lender to lower their interest rates for you. You may want to check out steps for improving your credit report and raising your credit score at Credit Reporting Corrections.