Bankruptcy in America has such a negative stigma associated with it, and many times those forced into bankruptcy end up there because of hardships that have occurred outside of their control. Yes, sometimes people make mistakes or exercise poor judgment, but that isn't always the sole reason that they need to file for bankruptcy. Sometimes there are medical issues, billing errors, unemployment, underemployment post job loss, and many, many other problems. Filing bankruptcy can actually be the responsible thing to do in certain situations. By taking legal action to erase certain types of debt, you are able to start fresh keeping only the secured items you need at payments you can afford. It will allow you to reduce stress worrying over bills you can't pay, make you happier that you are able to take care of your family without being hounded creditors, and perhaps improve your quality of life all around. Don't get me wrong, I'm not encouraging this, just stating that it isn't the end of the road if it's a situation you need to go through, and hopefully education people in general not to pass judgment on those who need to travel down this road.
There are many myths surrounding bankruptcy, and I think that's where many of the negative stigma are generated. It is a myth that you will lose all assets under bankruptcy. It doesn't mean that you get to keep them and erase the debt if they are secured, but generally you are able to work out affordable arrangements to keep secured items such as your home, car, etc depending on what chapter you file. A bankruptcy attorney can advise you on what is best and most applicable to your specific situation.
Sometimes people think that if they file, they can't get any credit again for at least 10 years. That's not true. Early on post-filing, you will have to pay higher rates, but as time goes on, and you re-establish timely payments, those rates will diminish. Yes, the filing may stay on your record for up to 10 years, but if you are able to re-establish yourself, your score will improve. I read from a bankruptcy attorney nc a very good statement about how bankruptcy can actually IMPROVE scores for certain people. Why? Because by the time people are looking into bankruptcy, their credit is likely pretty low at that point. By eliminating the debt they can't pay, they stop the negative reporting, lower the debt to income ratio, and once they start paying remaining debt on time, the score will go up.
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