If you've got more than $10,000 in debt, then yes, you should consider trying debt consolidation. My suggestion would be to get several free, no obligation quotes and see how much you can save. Make sure to choose a reputable, well-established organization - click here.

Now, bankruptcy.

Bankruptcy should be your last option, however, do not underestimate its ability to wipe away all your unsecured debt. I filed Chapter 7 in 2002 and it was the best thing I have ever done. All $63,000 of debt was wiped away in one clean shot. I had no assets (home mortgage, car loan, pricey artwork, etc…) so there was literally nothing my creditors could take as collateral in court. My creditors, at the time, were not interested in negotiating lower payments (their mistake) – so in the end they got absolutely NOTHING. None of them even bothered to show up to the bankruptcy hearing to dispute my filing.

Also, although the bankruptcy laws have changed since 2002, a good lawyer can make all the difference in the world to you. Hire a smart one!

Whatever you choose, I want you to take away the most important piece of information I can instill in you today: Credit cards are a for-profit business. The only thing they care about is how much money they can rake in for them and their shareholders.

In their quarterly financial filings, they allow for about a 5% delinquency rate (now over 9% as of this writing). They know that between 5% - 9% of people will never be able to pay their debts off - so do not feel that stigma of personal guilt or ostracism if you are so in over your head that you'll never pay off your credit cards. They don't care one bit about you. It's a business. You're a 16 digit number and they will do everything in their power to get you so in over your head that you are paying them off for life. It's like a drug dealer giving you that first smoke or line for free. They've hooked you and leave you dangling at their mercy.

If you truly feel debt consolidation or bankruptcy is the best solution for you, I want you to repeat the following statement as often as you need to – "to hell with my credit card companies!"

Do not let ANY guilt enter your head when you say this.

They are in it for profit. Nothing more.

They don't give a crap about you.

So, don't give a crap about them.

Do what you need to do to make your life better for YOU.

PS: Once your debts have been reduced, eliminated or dismissed (thru bankruptcy), watch the credit card offers start arriving in your mailbox. They don't want you to kick your habit. They'll be back to get you hooked as fast as they can all over again. 

"Banks and credit card companies used to lend you money so you would pay it back. Now they lend you money so you can't pay it back."