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Common Bankruptcy Myths Busted

Common Bankruptcy Myths Busted
"Many Americans are struggling to make ends meet and keep bill collectors at bay due to their mounting debt and inability to pay their expenses. Numerous of these individuals could benefit from declaring bankruptcy. However, many individuals also dread the stigma associated with bankruptcy. Many worry that filing for bankruptcy will permanently imperil their financial security. Here, we will debunk several prevalent bankruptcy myths and cast light on a topic that is considered taboo by many.

Declaring bankruptcy is a crime.

In contrast to the Monopoly board game, declaring bankruptcy is not the end of the road. In fact, filing for bankruptcy can provide debt-ridden individuals with a fresh start. While it is commonly associated with fiscal irresponsibility, there are numerous reasons why a person's debt can spiral out of control, and very few of them involve intentional or wasteful expenditures. By a wide margin, medical debts are the most common cause of mounting debt, followed by student loan debt, unemployment, and divorce. Frequently, these factors are entirely or partially out of the debtor's control. People buried under a mountain of unavoidable debt may find that filing for bankruptcy is their best economic option.

Never Will My Credit Recover

Although it is true that filing for bankruptcy will negatively impact your credit in the short term, it is by no means a recipe for disaster. In fact, many bankruptcy filers are surprised by how rapidly credit card offers resume arriving in the mail. Restart by procuring a secured credit card (in which payments are secured by a bank deposit) and making consistent payments on the card. Your credit score will gradually improve. In a few years, you may even be able to qualify for a mortgage, given the proper circumstances.

Bankruptcy is a panacea

A widespread bankruptcy misconception is that declaring bankruptcy will eliminate all debts and give the filer a fresh start. Filing for bankruptcy has numerous advantages, but it is not a magic talisman. Student loan and tax arrears are examples of debts that cannot be discharged through bankruptcy. Rebuilding after bankruptcy will take time as you work to regain the confidence of creditors. Depending on the form of bankruptcy you choose to file, you may lose assets such as your home or vehicle. A bankruptcy attorney will guide you toward the best solution for your particular financial situation, be it credit counseling, debt consolidation, or bankruptcy.

" - https://www.affordablecebu.com/
 

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"Common Bankruptcy Myths Busted" was written by Mary under the Finance / Wealth category. It has been read 117 times and generated 0 comments. The article was created on and updated on 31 May 2023.
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