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Even Donald Trump needs Bankruptcy Protection from Time to Time

One of the first and most things I hear from people coming in to my office consulting about a potential bankruptcy is "I didn't want to have to file Bankruptcy."  While that sentiment is commendable, the simple truth is that bankruptcy is often the right and sometimes only option available.  Credit card companies' ridiculously high interest rates makes paying off large balances almost impossible for the average wage earner.  The guilt about filing bankruptcy, in my opinion, stems from the many fallacies that the creditor PR arms have disseminated over the past decades.  In reality, at least in Oklahoma, most of the myths like you will lose your home, automobiles, retirement, furniture, etc. is just that, myths.  Also, bankruptcy can be the best thing that ever happened to your credit long term.  And those of you who feel beaten and embarrassed by the thought of having to file bankruptcy remember this:  Donald Trump has filed bankruptcy at least 3 times over the past 20 years.

In 1991 he negotiated with his creditors to give up the Trump Shuttle airline, a 49% stake in the Grand Hyatt Hotel, his 282 foot yacht, a 27% stake in the retail store Alexanders after falling behind on $4 billion in debt.  He also had to relinquish large stakes in the Taj Mahal and other casinos in Atlantic City.  By 1995 he had paid off creditors and trimmed his debt to $70 million and was even flying again in his own jet.

Trump defends bankruptcy as a smart business practice used by the likes of Carl Icahn and Henry Kravis. . ."We're using the laws to our advantage, That shouldn't be embarrassing, that should be smart."

So, when your considering your own bankruptcy remember that the laws are there for a purpose.  You may just need to make the smart play and file bankruptcy and, who knows, you may just be flying private soon!

Rebuilding Credit After Bankruptcy

Ok, so this is going to sound counter-intuitive but. . .often the best way to rebuild your credit is through, that's right, credit cards!  The very menace that most likely helped lead to your bankruptcy in the first place.  You see, most credit card companies report monthly activity to the credit reporting agencies - the businesses that determine your credit score.  Therefore, to help build your credit faster you will need to offset your prior credit troubles and tribulations with some positive news.  Now in doing so be careful of potential pitfalls.
The first one is to be very selective in the cards that you apply for and use.  You will very likely begin receiving credit card offers soon after your bankruptcy discharge.  The credit card companies know that you can't file again for several years and they view you as a somewhat safe bet.  CNN recently published an article detailing the 7 best credit cards for rebuilding your credit: http://money.cnn.com/galleries/2011/pf/1104/gallery.best_credit_cards_bad_credit/index.html
The 7 best in their opinion based on low upfront/annual fees and APR are Orchard Bank, Capital One Secured MasterCard, Navy Federal 'n Rewards Secured Card, Citi Secured MasterCard, Mango Prepaid MasterCard, Capital One Cash Rewards for Newcomers & Open Sky Secured Visa Card.
Another thing to be careful about is how you use the cards.  I would recommend to charge a very conservative amount each month - say on things that are necessary like gas and would normally otherwise pay cash for.  Instead, put the cash that you would normally use away in the cookie jar and make sure to pay off your balance in full at the end of each month.
Only apply for one or two credit cards as you don't want numerous inquiries showing up on your credit report.  If you follow these steps and stay current on your car and/or home loan, you should have an A credit rating a lot sooner than you may have thought.

Sesame Street and Credit Cards

Well, this just in.  Sesame Street is tackling another educational frontier - debt.  With millions of adults in the quagmire of debt agony, the developers and writers of Sesame Street are creating a new video program designed to teach financial literacy to children.  While already tackling such topics that confound adults such as healthy living and multi-cultural understanding this is just a new twist on a long policy of helping to educate kids now on problems and issues that they are likely to face as adults.  See more at www.sesamestreet.org/save and www.pncgrowupgreat.com.