A lot of Americans are struggling with debt. For some, their financial obligations are so overwhelming that they’re facing severe consequences, including home foreclosure and vehicle repossession. But even if you’re in that position, you might be hesitant to seek bankruptcy relief. After all, there are still a lot of negative connotations associated with the process, despite the benefits that it can provide.
We don’t want you to be scared away from the bankruptcy process and its advantages because of false information that’s been spread over the years. That’s why this week on the blog we want to look at some common myths about bankruptcy. Hopefully, you’ll have a more realistic picture of what bankruptcy has to offer you so that you can make the informed debt relief decisions that are right for you.
Myth #1: You’ll lose your house
Filing for bankruptcy will stay the foreclosure process, giving you time to get caught up on your mortgage. If you’re able to make your mortgage payments, there’s a good chance that you’ll be able to keep your home despite seeking bankruptcy protection. The same holds true for a vehicle that might be under threat of repossession.
Myth #2: You’ll lose all of your assets
As we discussed previously on the blog, numerous bankruptcy exemptions ensure that you’ll have a certain amount of financial stability, even once the bankruptcy process is completed. These exemptions are often more extensive than people expect, which can give them a greater sense of relief about pursuing bankruptcy.
Myth #3: Your credit will be ruined
While it’s true that a bankruptcy will negatively impact your credit score, there are ways to bounce back from this hit. You just have to be strategic in showing that you’re a responsible borrower who is capable of repaying debt. To give reassurances to lenders, you can use collateral to back certain debt. You can also consider taking on co-signers.
Myth #4: Bankruptcy is a sign that you’re a failure
This is far from the truth. The vast majority of people who pursue bankruptcy do so after suffering an unexpected loss that results in the accumulation of massive amounts of debt. Their family business might go under, they might unexpectedly lose a job, they may go through a financially ruinous divorce or they might come down with a serious illness that’s expensive to treat. Others might have accumulated debt before they had the money management skills necessary to keep themselves out of a large financial hole. Therefore, most bankruptcy filers, like you, are honest, hard-working individuals who have just had a streak of bad luck.
Myth #5: Bankruptcy will ruin your marriage
Bankruptcy actually ends up saving a lot of relationships because it alleviates the stress caused by debt. Those who continue to fight to pay back their debt are usually at an increased risk of marriage dissolution as financial hardship is one of the primary driving forces behind divorce. So, don’t be afraid to be brave in seeking out bankruptcy as a way to salvage your marriage.
Learn more about how to navigate your financial challenges
Don’t be lured into believing the negative talk out there about bankruptcy. This process can provide real debt relief in a way that can change your life for the better.
If you’re ready to seize that opportunity, you might want to learn more about what kind of bankruptcy is right for you. An attorney who is experienced in handling these matters can help advise and guide you so that you can make the informed decisions that are right for you and protect your future as fully as possible.