Bankruptcy is shrouded in misinformation and misconceptions, creating a level of uncertainty and hesitation for those who might benefit from the service. When you already struggle with anxiety over your outstanding debts, misunderstandings about bankruptcy can intensify those feelings.
Understand the facts so that you can make an informed, reasonable decision if bankruptcy is right for you.
You can rebuild your credit
You may hear that bankruptcy destroys your credit and is unrecoverable. Some people believe this because they view bankruptcy as a financial failure. When you feel overwhelmed with your debts and cannot meet those obligations, bankruptcy can be a responsible decision that allows you a chance to regain your financial stability and make responsible credit decisions going forward.
Filing for bankruptcy does damage your credit initially, but the effect is often less severe than continuing with past-due payments and delinquencies. Additionally, you can start building a responsible credit history sooner than you may think.
Bankruptcy law protects some assets
If you hesitate to consider bankruptcy out of fear that you will lose everything you own, understand the asset exemptions before you decide. Bankruptcy law offers exemptions to protect certain things, including your belongings, some equity in your car and your home. Additionally, a Chapter 13 bankruptcy may help restructure debts to pay off your assets over time so you can keep otherwise non-exempt assets as well.
Bankruptcy provides an opportunity to have a clean slate after a financial struggle. No matter why you find yourself in over your head with debts, bankruptcy may help you settle those accounts and start fresh.