If you have more debt than you can pay off, bankruptcy may be a viable solution to financial turmoil. Personal bankruptcy may allow you to discharge your debts or at least create a payment plan to repay.
According to U.S. News, there are a lot of misconceptions surrounding bankruptcy. Do not let the myths scare you away from debt relief.
Bankruptcy destroys your future credit
It is true that your credit takes a hit after the finalization of your bankruptcy. However, this does not mean that you cannot build your credit again. If you want to rebuild your credit, start with a secured credit card. The secured card allows you to put down a deposit that you borrow against. Most people can qualify for a mortgage within two to three years.
Bankruptcy proves irresponsibility
Some people have the misconception that the necessity of bankruptcy means that others will see them as irresponsible. There are a lot of factors to bankruptcy and no person should feel shame for filing. Many people have financial hardships due to divorce, medical bills and job loss. Hardworking people often file for bankruptcy.
Bankruptcy discharges all debt
Filing bankruptcy can help you to take control of your debt. The debts that you discharge can pave the way to pay off debts that you cannot discharge. For example, you normally cannot include student loan debt in your bankruptcy. Other debts that you must keep include child support and alimony.
Bankruptcy does not cure all of your financial woes, but it does allow you to have a fresher start and to feel relief.