A personal bankruptcy can be difficult, but you don’t have to feel like you’re alone. Many people go through bankruptcies each year.
Myths surrounding bankruptcy make some people feel as if they’re failures for struggling with debt. That couldn’t be further from the truth. Individuals who struggle with debt might have had medical emergencies, high student loans, the loss of a job or other factors play a role in overwhelming debt.
The choice to enter into bankruptcy isn’t easy, but it is important to make sure the myths of bankruptcy aren’t perpetuated. When they are, it makes people who could benefit from bankruptcy turn away from the solution that’s right in front of them.
Myth 1: People who choose bankruptcy don’t know how to handle their finances
This simply isn’t true. Long-term illnesses, the loss of a job or other factors can lead to bankruptcy.
Myth 2: Bankruptcy ruins your credit forever
Depending on your situation, bankruptcy could actually start improving your credit right away. If you missed payments, your credit has already suffered. However, eliminating those debts puts you in a better position and makes it easier to heal your credit score.
Myth 3: Bankruptcy eliminates all debts
Sadly, this isn’t the reality for most people. Bankruptcy will eliminate unsecured debts, but secured debts, like student loans or taxes, are less likely to be discharged unless there are extreme circumstances.
If you aren’t sure about entering into bankruptcy, it’s important to learn more before you make a decision. The right choice will help your financial security in the future.