Bankruptcy Myths to Ignore

Bankruptcy Myths to Ignore from North Carolina Lifestyle Blogger Adventures of Frugal Mom

Considered by many as “the nuclear option” for dealing with debt, there are a number of misconceptions surrounding the act of filing for bankruptcy protection. Some may even be preventing you from availing yourself of this protection when it could be your best route back to financial solvency. 

With that in mind, let’s take a look at some bankruptcy myths you can ignore.

1. Only Irresponsible People Need Bankruptcy Protection

Anyone who has ever had the experience will tell you, life’s fortunes can turn around in an instant. One minute, all is well — you’re making more money than ever before — the next instant something untoward happens and your every resource gets depleted through no fault of your own whatsoever. 

This is why bankruptcy laws exist. Find an attorney that specializes in bankruptcy law, like this Harrisburg PA bankruptcy attorney. If you are considering filing for bankruptcy, it is important that you find the right attorney to represent you. Finding the right lawyer can be difficult, especially since people may not know what to look for in a lawyer or how to find one.

Things can and do change. Job loss, medical emergencies, natural disasters, baseless legal claims — any of these can decimate your personal finances. Long story short, there is no need to feel shame in this game, as long as you’re in it for the right reasons. 

2. You’ll Never Get Credit Again

You might be surprised to learn there are lenders whose business models are predicated upon lending to people who have filed for bankruptcy. It can be a solid enterprise when you think about it. After all, Chapter 7 filings are limited to one every eight years. 

Thus, the odds of you filing again and leaving them in the lurch are next to zero. This makes you a pretty safe bet — if you can demonstrate you have the income to service the obligation. 

A surprising number of people get home loans, car loans and credit card offers within a few months of filing. Yes, the interest rates are considerably higher than they would be with a perfect credit score, but the fact remains, credit is available. 

3. It’s the Only Way to Eliminate Debt

Even with all of the other myths being debunked here, bankruptcy should still be your final course of action when you’re having money problems. There are many forms of debt relief to consider before filing for bankruptcy protection. 

Among them are credit counseling, debt management, debt consolidation and debt settlement. Bankruptcy protection should usually only be considered if none of those other avenues prove navigable. 

4. You’ll Forgo All of Your Possessions

Homes and cars and clothing are protected. Yes, you might have to surrender certain luxury items, but more often than not, anything against which you have a loan can be kept if you have the ability to pay for it. 

In other words, you can keep your house if you can still make your mortgage payment, ditto your car. In most cases, people who file bankruptcy surrender very little property at all. 

5. Bankruptcy Can Destroy a Marriage

As we mentioned in number one above — unfortunate circumstances can befall anyone at any time. And yes, money problems are one of the leading catalysts of marital discord. However, freeing yourself of financial burdens can also help return solace to your relationship. 

Relieved of the worry accompanying money problems, you can focus your attention on mending the aspects of the relationship strained by monetary concerns. So while choosing to file for bankruptcy protection is a decision to be made with a great deal of consideration, it’s far from the “death sentence” many people have been led to believe it is. 

In fact, the realities behind these bankruptcy myths you’d do well to ignore demonstrate a filing could be the first step toward rebuilding your credit, restoring your financial solvency, and healing your family life. In other words, rather than something to fear, bankruptcy is something to respect and treat accordingly. 

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