Credit Card Quick

Credit Card Protection Plans: Information the Consumer Needs to Know

Choosing Credit Card

More often than not, when applying for a credit card, you will be given the option to enroll in a credit card protection plan. It sounds like a good deal; a type of insurance that protects you, the consumer, from the fraudulent use of your card whether it is lost, stolen or compromised. Consumers  used to often declined the added expense of the coverage, but in this day and age, with identity theft becoming a growing concern, credit card companies have repackaged the deal and more and more consumers are taken advantage of it “just in case.” After all, who wants to see their good name go down the drain because of someone else’s misdeeds? Credit card protection plans are also there to help in the case of a lost income, illness or disability.

The Cost

Some credit card companies charge you a small fee per month; others as much as 50 cents to $1.00 per every $100 you owe. It sounds inexpensive, right? To a certain degree, it is relatively inexpensive, considering the protection the consumer is offered, however, consumers need to be aware that these fees are often treated the same way as a purchase, making the subject to interest, fees and penalties. In addition, the more you use your card, the more you are going to pay for coverage. However, if you are not carrying a balance on the card, no fee will be charged.

Eligibility

It all sounds terrific. You are protected from thieves and the uncertainties in life, when it comes to your credit card bill, however, not so fast! On the surface, it seems like an excellent deal, but are you eligible for the coverage? If you are unemployed when the card is given to you, you won’t be eligible for some coverage. The same goes for voluntarily leaving your job and then being unable to pay the bill when it comes. The self-employed can not obtain coverage, and those who are laid off must wait 30 days to ask for protection and show proof of having applied for unemployment compensation.

The Coverage

Protection plans vary from company to company and card to card, so you will want to read that fine print and know exactly what it is you’re applying for and paying for right up front. Often, the coverage will go into effect if you encounter a disability or illness that prevents you from working or happen to lose your job unexpectedly through no fault of your own. However, for some things, there is a waiting period and documentation will have to be provided. If you are eligible for coverage, interest and late  fees will be waived for a period of time and you may not even have to make any payments for a while. You will still owe a balance, but they will work with you during the period that you are trying to get back on your feet. During this time though, you won’t have access to your line of credit, as the card will be frozen and you won’t be allowed to use it.

Is Credit Card Protection worth it?

As long as you are a responsible credit card consumer who fits the eligibility requirements and pays their bill on time, there is nothing wrong with paying a little extra for the added benefit of insurance against life’s little “what ifs.”

The 2010 Credit Card Act: Who Won’t Be Affected?

Introduction

Credit card companies are in the money business, meaning money (and lots of it) is their utmost concern. Of course, they do care about the consumers somewhat, offer certain protections. After all, the consumer is what makes up their bottom line. Still, concerns about consumers and fair practices are not always first and foremost on the minds of the credit card companies.

Since the last major reform 30 years ago, credit card companies have not always been fair, employing sneaky practices to increase their profits and make up for their losses. It is a risky game they play to begin with, and the consumer, who wants to keep their good name and their credit card, often has to just live with what the credit card company has done.

Changes in 2010

On July 1st, 2010, the FTC’s new Credit Card Act will go into effect. This is to ensure more fair practices and consumer protections. In the meantime, credit card companies have been employing their same old tactics at a more rapid speed, raising rates to protect themselves from loses and gear up for the coming changes. Consumers can look forward to new laws that protect against the practice of double-cycle billing, put new standards on how, when and why interest rates can be increased, put forth a set grace-period without penalties and even allocate payments toward higher interest debt first.

Not Everyone is Covered

This new credit card reform is a good thing for most consumers. However, there are some who will not have the benefit of being covered under the new laws. There are those who carry credit cards who are not considered consumers and others who are already protected under other laws. The current reform will only protect the average American credit card holder; the everyday consumer.

Businesses are also a Target

Commercial credit cards – those held buy all kinds of businesses – will not be covered under the new laws. These are not considered consumer credit cards. many businesses rely on credit cards to help with cash flow, expenses and accounting practices. Unfortunately, due to the lack of added protection under the new law, credit card companies could see this as an opportunity to gain back some of their losses. Business cardholders should brace themselves for a rate increase.

Military Returning from Deployment

Members of the military are covered under a law that demands their interest rates be set at 6% while they are deployed. When they return to American soil, their rates can then be returned to the original, often much higher amount. Currently, this is not one of the approved sets of credit card holders affected by the law. Perhaps it was an oversight, as a question about this subject baffled the Federal Reserve Attorney. The situation is being reviewed, and perhaps by the time the law goes into effect, military personnel will be covered as well.

Credit Card Companies Gearing Up For Change

News

As the credit card act goes into effect, cardholders will want to pay close attention to the kind of card or cards they carry and how they might be affected by these new changes. Depending on what you have in your wallet, you might find yourself paying more, or in some cases, less. Either way, the new laws might affect you and you will certainly want to know about it. Some parts of the credit card act will make it more difficult to obtain certain kinds of credit cards, however, this could be a good thing. Credit card companies will no longer be able to extend credit haphazardly, and those who can’t afford the credit card won’t find themselves in the deep debt they knew they could not handle in the first place.

Student Credit Cards

Kiss those sign-up tables with enticing free perks goodbye! Apparently, free pizza just isn’t worth all that easy-to-acquire debt. Students under 21 will now have to prove that they have a source of income or have a parent willing to co-sign financial responsibility on the card. The future of student credit cards looks to be more along the lines of debit cards and prepaid cards as well as cards with higher interest rates and lower credit limits, teaching some lessons in financial responsibility and budgeting to a younger generation.

Rewards Programs

Credit card companies have already begun tightening the reigns when it comes to rewards programs, however, things are about to change even more. The days of generic spend a buck get a buck or a point look to be falling to the wayside. New programs will be specifically geared toward certain lifestyles and audiences, such as music downloads, sports fans, etc.

Low-Interest Rate Cards

Comparably, these cards will still carry a lower rate, however, the interest is about to go up by several points, so be prepared to pay more. People hoping to get a low interest rate card might find it even more difficult now, as the credit card companies don’t exactly find these to be their best products, at least from their viewpoint, as they just can’t charge much to make their own profits. Credit card companies will tighten the requirements even more, so these cards will be harder to come by.

Prepaid Cards/Gift Cards

As of August 2010, all fees will have to be disclosed before purchase, and you no longer have to worry about losing your money because a gift card expired so quickly. Expiration dates will now be fives years from the date of purchase.

Business Credit Cards

There are no changes in the credit card act that will have any effect on business cards. Consumer credit cards are the only ones included in the provision.

Gas Cards

As for the cards that are co-branded with an oil company logo, they will be offering more rewards and perks, however, you’ll make a few cents less per purchase and overall, the card is going to cost you more.

Debit Cards

Interesting changes are coming to debit cards. Banks will no longer be allowed to charge hefty overdraft fees. We might even begin to see more debit cards offering rewards and perks to the user. However, it may cost up to $30 to have a debit card if banks start charging an annual fee.

Balance Transfer Cards

The enticing offers will still be there, but expect to pay more as interest rates rise. While some companies might still offer incredible introductory terms, for the most part, you can expect to see shorter terms and fewer 0% introductory rates. Still, the rates will be decent. 7 to 9% is not bad in the overall scheme of interest rates.

Post Bankruptcy Tips: How to Get back on Track and Stay on Track

Bankruptcy

If you have recently filed for or been discharged from a bankruptcy, there had to have come a time when your financial life began to take a turn for the worst, slowly meeting up with its demise. While it is true that some people wind up in this boat simply because they were irresponsible or failed to heed to caution, most people who file bankruptcy got there because of life’s unforeseen circumstances and their lack of ability to control them. In those cases, bankruptcy can be a real blessing; rescuing you from the burden of a financial problem that seemed insurmountable.

The sense of relief one feels when successfully getting out from under overwhelming debt is almost indescribable. However, one thing you do not want to do is to forget how overwhelmed you felt prior to filing for bankruptcy. That way, you can avoid winding up in the same boat again, or at least take steps to avoid it as much as you can. Financial death can happen to anyone at anytime. However, financial suicide is a whole different matter. The following tips can help you to get back on track and stay on track, avoiding the post-bankruptcy blues:

Your Credit Report

Yes, you want your credit score to improve substantially. However, that’s going to take some time and effort. For now, you need to take a good look at your credit report and stay on top of it. Get copies from each of the three credit bureaus (you’re entitled to one free report from each of these every year). Look them over and make sure your bankruptcy and discharged debts are noted. If there are any discrepancies at all, call and have them fixed immediately. While this may not do much to improve your score right away, it can help some and is a step in the right direction.

Credit Counseling

If you were not required to seek credit counseling as part of your bankruptcy requirements, now might be a good time to give it a shot. You’ll learn a lot of great things about money, budgeting, savings and maintaining a healthy financial life. This counseling could truly make a difference in staying the course or falling back into bankruptcy again.

Your Debt

If you have debts leftover that were not discharged, set up a plan to pay those debts off as quickly as your income allows and get them off your back. For your current bills and any newly acquired debt, make a point to stay ahead of the game by paying the full amount due  in advance or at least on time each and every month.

A credit card is a great way to rebuild your credit. Your best option is to go with a secured card. Just make sure you pay the bill on time, the company reports your activity to a major credit bureau and that it is not reported as secured.

Loans

It is best to wait several years before amusing a loan. Smaller loans are acceptable as long as you pay them back quickly. For large loans though, give yourself some time. Get back on your feet financially. After a couple of years, if you want a car loan or a mortgage, you will be able to get a better interest rate then if you jumped right in after bankruptcy. On a car loan, minimize the term of your loan as much as possible, or you might wind up paying far more than the car is even worth! When it comes to choosing a lender, watch out for those bleeding hearts that say bad credit is ok with them. It is ok with them in the form of the highest interest rates going!

As long as you make a conscientious effort to stay on track after bankruptcy, you should be fine. Granted, life does happen and financial problems are not always avoidable. However, if you have been down bankruptcy road once, it is easier to identify the mistakes of the past and avoid them, increasing your chances of escaping the same pitfalls the next time around.

Credit Cards for Bad Credit: A Good Idea?

Credit Card Types

It’s an alluring idea. You have struggled with turn downs due to no credit or bad credit and now you have the opportunity to have your very own credit card. Granted, credit cards for those with bad credit often carry a higher interest rate and low credit limit, but they do give you the chance to build or rebuild your credit. For this with no credit, it is an excellent idea. For those with damaged credit, you need to ask yourself if it’s really the right route to take, considering your already dented credit score.

On the Path to Rebuilding Credit

If your credit is already terrible, but you are absolutely serious about getting things under control, there are some steps you need to take. Start working out payment plans and paying down your debts. Work with a credit counselor or debt consolidator if you need to. Check your credit report to ensure that your progress is being accurately reflected and that no inaccurate information is appearing. Continue to pay your current bills that are not in default or arrears on time and in full every time they are due. This will go a long way in improving your credit report and might lift your score upward several points.

Once you have all this debt behind you, it is time to think about rebuilding your credit. If you want to be deemed credit worthy in the future, you need to get that score up and keep it up. There are several options to look into for rebuilding credit, however, you have to decide which ones are the right fit for you. You could buy a car from a place that offers financing, pay your payments on time and your credit score will be improved as your activity is re3ported over time. You could also go the rent-to-own route for furnishings and appliances, so long as the company reports your activity. You bank accounts are another good way to help build credit.

There are lots of other options out there, among them credit cards for those with bad credit. Should you do it?

The Credit Card Option

It is not a bad idea, per se, to open a credit card account and get your hands on a high interest card with a low credit limit in order to help rebuild your credit score. It can work and work well, if undertaken in a responsible manner. You will need to use the card wisely, ensuring that you not only pay the bill and pay it on time, but that you pay it in full, as this can make a bigger difference in your credit rating and your finances than a minimum payment.

Now, if you are suffering the low income or no income blues, this might not be the option for you at this time. When you’re back on top of your game, you might reconsider it. If you problem is poor spending habits or financial irresponsibility, you might want to get help to get this under control before you obtain a new credit card to rebuild your credit. If your credit has already gone down the drain, there is no use getting a new card that you can not or will not pay for. A card intended to rebuild your credit can not do it’s job if you don;t do yours. You’ll simply be left with more debt and an even lower credit score.

Hook, Line and Sinker: Things the Credit Card Companies Won’t Tell You Upfront

Introduction

Hook, line and sinker. Yes, the credit card companies are trying to reel you in. More customers equals more money, and of course, they certainly like that. Who wouldn’t? Does this man you should steer clear of credit cards altogether? No. Absolutely not. Having a credit card or two in your possession can e very beneficial..

Credit card companies put enticing offers out there and don’t give you all the facts up front. That’s the way it goes with advertising. If you fail to read the fine print, you are ultimately responsible for the outcome.  The credit card company is not going to take any blame for you’re lack of knowledge about something just because they failed to tell you. Truth be told, it’s not their responsibility to tell you every little thing upfront. A smart and savvy consumer will read everything and be in the know before they ever use that little plastic card. Here’s a few things to watch out for that could make a difference in saving money or breaking the bank to pay off your card.

0% APR

0%? Not even close. This might apply to balance transfers only. You might get a card that allows 0% APR on both balance transfers and purchases. Either way, it is an introductory rate. There will be hidden fees for using the card for other things, like cash advances, and you payments will only be applied to our lower interest balances until they are paid off, leaving you with more debt to pay. To top it off, that 0% APR is literally only an introductory rate. After the first few months to one full year, you’re going to get slapped with a bill that might reflect interest rates of a caliber you were not expecting. Read and get to know the terms on such a card. Use it wisely to avoid a lot of debt. To avoid this eventuality altogether, look for a card offering a low fixed-rate APR. These do not change over time and will only change with your renegotiation or failure to pay.

The Universal Default

Thought your rate was secure with your card once you got it? Thought your subsequent debt with other creditors would make no difference? Think again. If you wind up with ad debt with another creditor and if affects your overall credit rating, paying your credit card ill in full and on time  might not make a whole lot of difference. You should still pay the bill, of course, but when the credit card company catches wind of any issues on your credit report (and they will!), this is their excuse to raise your rates. Even being a good customer to them does not change their view that you might now be a high-risk customer.

Paying the Minimum Balance

While this can be a life-saver in your time of need, don’t make it a habit. Some companies offer a minimum payment of as little as $10 per month. if you only pay this amount every month, you are not going to make much of a dent in your debt. On top of general card use, you’re going to have fees and interest that accrues every single month. Not only will it take you a very long time to pay off the debt, you will wind up paying a whole lot more in the long run. The minimum balance payment is great in a pinch, but it can also lead to more trouble than it is worth.

Rates and Terms

Don’t ever make the mistake of thinking that your rates and terms are set in stone and are thus unchangeable. Nothing could be further from the truth! Card companies can change their policy at their own whim and discretion, giving you little notice to prepare for said changes. However, you might be ale to work these things out in your own favor. Should the credit card company alert you of impending changes, try  taking advantage of term flexibility. If you have proven track record with the company and have been in good standing for a couple of years, call them and try to renegotiate the rate. It never hurts to ask!

Knowing these things in advance will, hopefully, help you to become a more educated and sophisticated credit card user; avoiding higher debt and reaping the benefits of plastic.

Financial Vulnerability: Bankruptcy Pitfalls to Avoid

Bankruptcy

When your financial crisis has come to a head and your only option is bankruptcy, you’re at a pretty vulnerable point. There will be alluring ideas waiting on you, as well as some less than respectable people waiting to take advantage of the state you are in. This does not mean you should steer clear of filing bankruptcy if it is going to make your life a lot better, nor does it mean you should avoid businesses and services who are there to help you. You simply need to be aware and be on the lookout for things that could lead to further financial trouble and to avoid things that could easily lead to your being taken advantage of.

Credit Counselors

Credit counseling is a wise idea if you find yourself in a bad way financially. For those who are filing bankruptcy, it is often a requirement of the court that you go through a credit counseling program and receive your certification. Credit counseling can teach you how to budget, how to manage your bills and finances, they can negotiate some of your bills for smaller settlements and can give you a lot of tools for a healthy financial future. Even people who are not in financial trouble could benefit from such services. Unfortunately, not all of these services are reputable, having less than your best interest in mind. If you need to go through one of these programs, ask if your state or county offers a free program. If not, ask for a recommendation from the court or someone who knows all about it. Do not trust advertising and be one the lookout for those who want a bunch of money up front. Some of the most unscrupulous companies will gladly take your money while failing to deliver what they have promised.

Watch out for credit repair offers as well. Accurate information can not be removed, even if it is negative. If something is old and needs updated, or is inaccurate, you can call the credit bureaus yourself to see that this is taken care of.

Risky Financing

Once a bankruptcy is discharged, you might think that offers for financing and refinancing would be slow or non-existent. The truth is, a lot of these offers will start coming out of the woodwork once your bankruptcy is behind you, even if it is still on your credit report. Why? because the lenders making the offer operate on the assumption, whether true or false, that because you filed for bankruptcy, you are less likely to get into financial trouble again. It is not real smart on their part, as some people do file for bankruptcy numerous times. Some are irresponsible and others, well, life happens.

Some of the offers you might see are refinancing options for mortgages, loans and even credit card offers. It is not a bad idea to take a lender up on an offer. Sometimes, it can help to rebuild your credit. However, you will want to pay close attention to the terms and conditions, as well as the rates you will be expected to pay. You will want to weigh this against your financial ability and will want to ensure that you are responsible with paying the bill each and every time it is due.

Once you have filed bankruptcy and had a favorable decision, you just want to be careful. Work to get your financial health back on track and be wary of things that could lead you right back into bankruptcy court.

Credit Repair: How You Can Help Yourself

Credit Repair

Maybe you’ve faced some difficult times. Maybe you were, admittedly, a tad bit irresponsible at some point. Whatever the case, you’re credit score doesn’t shine, and you’re probably finding yourself jumping over hurdles to obtain any kind of credit or loan. Once obtained, you are finding yourself paying higher rates, or maybe you’re hearing “No way!” far more often than you’d  like to.

The good news is there are things you can do to improve your credit situation. You have to know what you’re looking at as far as your credit score and debt, be ready and willing to face your credit score and work to improve it, and you must be committed to seeing the process through, as well as maintaining your credits score after improvement.

Hiring a Professional

Hiring a professional to help you to repair your credit is an individual choice. While it is not absolutely necessary – you can repair your credit on your own – it might e a wise idea for those who are not financially savvy or for those who fear treading the muddy water of credit repair alone. A credit repair specialist can advise you and help you to repair improve your credit score; they can even negotiate your payments for you, often saving you money off the original balance. However, the service does not come without a cost, so if you are willing to pay for help and feel you need it, there’s nothing wrong with doing so.

However, should you want to just take care of credit repair on your own, here’s some smart DIY tips to help you pay off your debt and improve your score. Even if you want to forgo the professional credit repair agent, you might still want to consider the invaluable services of a consumer credit counselor. They can help you to better understand your credit, finances and how to create a budget and stick to it.

Keep up with your credit report and score

You are entitled to one free report from each of the three credit bureaus every year. Take advantage of this and stay on top of things. Knowing your score and what’s  in your report will help you tom pay down your debt and substantially improve your credit. Review the reports, highlight important things and dispute discrepancies. You want your report to be accurate and only you can ensure that it is.

Tackle those debts!

Find out what it is that you owe and who it is owed to. Bring accounts that are past due, but not yet charged off, up-to-date.  Pay off those charge offs and work with debt collectors and creditors to make payment plans and pay off what you owe. Remember not to let your accounts in good standing wind up on the back burner while you take care of past due debts. It is not an overnight process. Take things one step, one payment at a time. Pay your current bills as usual and work to make payments you can afford on the rest.

Maxed out? Pay the limit back down

If you are maxed out on your credit cards, it is going to cost you in points on your credit score. Work to pay your cards down below the credit limit and then to pay them off completely. This will substantially improve you score. Remember, your total debt vs. your total available credit makes up 30% of your credit score.

Build that credit up

Once things are paid off, work hard to build your credit back up. Credit cards and loans that are being paid and reported on time are great ways to do this. Another way is to try and open a new credit card account and keep it below the max and paid on time. Only make one or two applications, so as not to impact your credit score with tons of credit inquiries. If your past credit negatively impacts your chances of getting approved for a regular credit card, try going for a store card of some kind. You could also try a secured credit card, which has a slim denial rate, since you pay a deposit for the card.

Follow these steps, and i due time, you will notice a major improvement to your credit score. Maintain it and you will open plenty of doors in the future that you never imagined possible before your credit was repaired.

Capital One Venture Card – Better Rewards for Frequent Fliers

Credit Card Rewards

If you’re a frequent traveler who uses a credit card for all of your airline purchases, you probably like having the benefit of a card the rewards you with free miles. Does it ever seem to you, though, that it takes a while for those miles to add up and there are far to many terms, conditions and restrictions for acquiring and redeeming said miles? Well, you’re not alone. That’s the complaint of a lot of consumers when it comes to both bonus miles and other credit card rewards programs. If this is a concern for you and you want a better card, made just for frequent travelers, that pays more rewards to you and does it faster, welcome to Capital One!

Capital One Unveils New Miles Rewards Card

Capital One has recently introduced the Capital One Venture card. Venturesm, the term coined to describe the program, is a frequent flier rewards program that really ups the ante when it comes to paying you back. Unlike other rewards programs, Venture is a premium travel credit card that gives you double miles (2 miles per dollar spent) for every purchase and does not have all those other pesky restrictions. There are no limits on how you can earn your double miles, or even when or where; no retailer or merchant restrictions, no  purchase categories to stick to and no pre- or re-enrollment requirements. You can accumulate as many miles as you wants as well. When it comes to redeeming those miles, you can book on any airline, anytime, anywhere, and the miles won’t expire either. Yes, Capital One is living up to its no hassle guarantee!

How It Works

It’s easy! Capital One Venture cardholders simply make their purchase using the credit card and then call Capital One to be reimbursed using the accumulated miles. This refund is then reflected on the next billing statement. To calculate the number of miles needed for a purchase, multiply the purchase price by 100.

The Plot Thickens

Think the Venture card sounds great already? Well, there’s even more! With the venture card, there are no foreign transaction fees. You do not have to redeem your miles for airfare alone. You can use them for other travel purchases as well, such as hotel rooms, rental cars and more. Because the venture program is a premium program, you will be treated like a VIP customer with exclusive customer service and preferred access to certain events and venues, and exclusive promotional offers from top hotels and retailers too.

The Finer Print

As an added bonus, if you spend $1,000.00 in the first three months of owning your Venture card (and most frequent travelers will; it doe not take long for a traveler to spend a lot), you will be rewarded with 10,000 bonus miles. The rates are pretty good too. There is a $59 annual fee, which is waived for the first year. You will carry a 13.9 % variable APR on all purchases and the same on all balance transfers with no additional transfer fee.

If you want a traveler’s card that is affordable and rewards you well, the Capital One Venture card is certainly for you!

Debt Consolidation a Possible Alternative to Bankruptcy?

Bankruptcy

When financial woes have the road ahead of you seeming pretty bleak, it can be quite overwhelming. The idea of simply ignoring the debt collectors and everything else tied into your finances often sounds appealing. Unfortunately, it’s no solution. The problem is still going to be there, no matter how long you run from it. The longer you wait to take action, the worse it can get. You do have options. You could pay your bills off by making payment arrangements or paying them in full. You could file for bankruptcy, or before you race off to file those papers in court, you might consider debt consolidation.

What Debt Consolidation Isn’t

Debt consolidation. It sounds like a type of loan allowing you to pay off your creditors and transfer the debt to one company. No. That is a common misconception. Debt consolidation is not the same as a consolidation loan (a long term loan to help pay off your debts). The company is not going to give you the money to pay what you owe. You’ve probably seen the ads. “Consolidate your debts! Let us help you pay your bills! Pennies on the dollar!” Below that, most of them typically tell you that this is, in fact, not a loan.

What It Is

So, what exactly is debt consolidation? Debt consolidation is similar to certain types of bankruptcy, without the bankruptcy tag. With the help of a debt consolidation company, your debts are reorganized and renegotiated, allowing you to pay off what you owe for a lower monthly payment than before and sometimes for less than the original amount. Of course, the debt consolidation company will want their share of money too, however, the price should not be burdensome, considering what they do. The only thing to watch out for is companies that want a significant amount of money up front and then don’t deliver results. The truth is, these companies have to give you a contract that lays out the plan in black and white with a clause that allows you to back out within 3-days. Legally, they can not ask for money until they deliver the goods.

Is Debt Consolidation Right For You?

If you’re thousands upon thousands of dollars in debt, by all means, file bankruptcy if it is the only way you can see yourself keeping your head above water amongst huge waves of debt. However, if you are only a couple of thousand to a few thousand dollars behind, consider debt consolidation. It might be the best choice for you. Think about it. There is no guarantee, depending on what chapter of bankruptcy you file, that your debts will be discharged. In that case, you are forced to reorganize and pay off what you can; sometimes a few debts will be canceled and others reduced. That’s really no different than a debt consolidation plan. With a bankruptcy, you’re going to pay, out of your own pocket, upwards of $600 to $1000 just to file. Then you may also have the expense of a credit counseling program, as well as any debts left to pay off. When you look at it from this angle, debt consolidation seems to have its advantages.