It’s easy to slip into hopeless and despair when you’re dealing with overwhelming debt. Creditors can start to harass you, you may be forced to pick which bills to pay and you may wind up subjected to repossession and foreclosure. All of this stress can leave you feeling like there’s no way out. But there is one. Personal bankruptcy could give you the debt relief that you want and need. If you’re like many Americans, though, you’re worried about what the process could mean for you and your future.
But there are a lot of myths out there about the bankruptcy process. If you buy into them, then you could deny yourself the opportunity to clear crushing debt and secure a fresh financial start. But we understand your concerns, which is why in this post we want to look at some of the most common misconceptions about the bankruptcy process, that way you can make the fully informed decisions that best protect your future.
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Common myths about personal bankruptcy
Figuring out what the bankruptcy process can do for you can be confusing given conflicting accounts found online. We want to make sure you’re aware of some common misconceptions about personal bankruptcy. This includes the following:
- Bankruptcy will force you to give up all your assets: If you pursue a Chapter 7 bankruptcy to clear most if not all of your debts, then you may be required to sell off some of your assets to pay back your creditors. But there are multiple bankruptcy exemptions that ensure you’ll have a financial foundation even after your bankruptcy is finalized. For example, you can keep tens of thousands of dollars in home equity, several thousands of dollars’ worth of a vehicle you own, your retirement accounts and several thousands of dollars in personal property. So, if you pursue your bankruptcy appropriately, then you should have some financial stability when all is said and done.
- Your credit will be ruined: While it’s true that a bankruptcy will remain on your credit report for several years, there are steps you can take to rebuild your credit. You can have co-signers on loans, pay your financial obligations on time, obtain secured lines of credit and maintain stable employment to bring your score up. Raising your credit score can take time, but you certainly aren’t locked into a ruined a credit history until the end of time.
- Bankruptcy is a sign of failure: Many people who end up seeking bankruptcy protection do so because of unexpected expenses, employment problems or simple bad luck. And you’re not alone in facing financial woes. Millions of Americans are struggling with debt, and many of them turn to the bankruptcy process each year for relief. So, don’t be deterred from seeking bankruptcy protections simply because you think it’s a sign of failure. It’s not. It’s an opportunity at a second chance, which is something everyone deserves and was the intent when the law was created.
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Is personal bankruptcy right for you?
It very well may be, but the specific steps that you should take to alleviate your debt burden will depend on the facts of your circumstance. With that in mind, you should fully explore your debt relief options before settling on a path forward. By reading up on them, you can make the decision that best protects your future and your financial interests. If you have questions about the bankruptcy process and what it can and can’t do for you, then we encourage you to continue reading our blog and the rest of our website.
