With spiralling levels of personal debt many people are turning to Bankruptcy as a way out. But what exactly is it:
In summary Bankruptcy is the status of being legally declared unable to pay your debts. Proceedings are enacted that allow a person or organization to liquidate their assets to pay a reduced amount to their creditors or that allow the rehabilitation of the debtor by requiring creditors to accept reduced payments from future earnings of the debtor. A declaration of bankruptcy will remain on a person’s credit report for varying lengths of time. Declaring bankruptcy is generally considered a last resort as it will effect your ability to obtain any form of future debt, including mortgages.
Annual fees are the annual cost of membership to a particular credit card account. Nowadays, savage competition has forced most credit card companies to produce offers that omit annual fees. However, some fee based cards remain, so keep your eyes peeled.
If you’ve been with the same credit card for some time it might be worth checking your terms and conditions to see if you’re paying an annual fee. If so you will almost certainly be able to find a better deal elsewhere.
Annual Percentage Rate (APR).
The yearly cost of a loan, including interest, insurance, and the origination fee (points), expressed as a percentage. Often applied to mortgages, credit cards, and financing.
It always pays to check your APR thoroughly. Many credit card companies employ all manner of trickery to conceal the true rate. A favourite tactic can be a six month discount period in which you receive a very favourable APR, however post discount period your APR shoots up dramatically. You may also be asked to pay a monthly fee on top, which can further skew the true cost/APR.
Be vigilant and read the small print before signing up.
