Are bankruptcy myths keeping you from handling debt?

Are bankruptcy myths keeping you from handling debt?

by | Apr 27, 2017 | blog |

Dealing with a substantial amount of debt can cause you to face extreme stress and anxiety. Even though you may want to take action to address your debt issues, you may feel uncertain about what option could work best for you. Unfortunately, you may not receive reliable information pertaining to your viable debt relief avenues, and it can prove especially difficult to determine fact from fiction when it comes to bankruptcy.

Numerous untrue ideas surround bankruptcy that many individuals take as fact. You may have heard and believed many of these myths yourself, and as a result, bankruptcy may not land at the top of your list of debt management options. However, with the right information, you may find that this route could prove more helpful than imagined.

Losing assets

One major myth pertaining to Chapter 7 bankruptcy revolves around losing assets. Many individuals believe that, if they utilize this form of bankruptcy, they will lose all of their property as part of the liquidation process. However, most individuals keep a considerable amount of their property even after filing for Chapter 7.

Though some of your property will go through liquidation in order to address outstanding debts, certain property may fall into the exempt category. As a result, you keep that property in order to live your daily life. Additionally, creditors likely do not want small items with only sentimental value, and therefore, those assets have no reason to go through liquidation.

Paying off balances

You may consider simply avoiding relief methods other than paying off your outstanding balances yourself. However, this route may not have the desired effects. If you cannot make more than the minimum payments each month, the accrued interest and fees may cause you to make little to no headway in paying off your balances.

Though you may want to avoid the financial impacts that bankruptcy can have, you may want to understand that unpaid balances, repossession and other negative effects stemming from debt can also damage your credit score and other financial records. As a result, bankruptcy may prove more beneficial in the long run.

Bankruptcy as a failure

Many individuals view bankruptcy as a form of failure. Looking at this debt relief process in such a way greatly demeans its actual use. By filing for bankruptcy, you have decided to take a stand against your overwhelming debt and work toward getting back on track. Rather than looking at this route as a failure, you may wish to view it as the beginning of your fresh financial future.

In order to gain more reliable information on bankruptcy and your options for utilizing the process, you may wish to speak with an experienced Pennsylvania attorney. By consulting with a legal professional, you can rest assured that the knowledge you gain is factual.


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