It’s certainly true that not many people have the end goal of filing bankruptcy. However, sometimes it is better for you, your family, and your credit score to do so. One thing that often stops people from taking this step is that they don’t really know the facts. Inaccurate social media posts and opinions from friends can lead you to make poor decisions regarding your credit.
Once you realize that some of the information you have regarding bankruptcy is just a myth, you can make a more educated decision about your financial future. Below are some of the more common myths that often surround bankruptcy.
You Lose Your House
While there are cases of bankruptcy that involve people losing their homes, you actually get to make that decision yourself. Bankruptcy terms allow you to keep certain items and property and exclude them from the bankruptcy. Under Chapter 13, you can keep your house after making arrangements for affordable payments provided that your home is not valued higher than the courts allow.
Under Chapter 7, you can exclude the house from the list of debts you want to be discharged. Just be sure that you can make the mortgage payments once the bankruptcy is discharged. Click here to read more about Chapter 7 bankruptcy.
You’ll Never Have Good Credit Again
There is no doubt that bankruptcy has an impact on your credit score. However, unpaid debts don’t have an expiration date, and bankruptcy only reflects negatively for a certain amount of time. If you leave your debts unpaid, you could actually be causing more harm to your credit, and sometimes bankruptcy is your only option for repairing it.
With bankruptcy, you get a fresh start and can start building your credit right away after the bankruptcy is discharged. Initially, you might pay a higher interest rate than most people, and you may not be offered the best credit opportunities until you rebuild your credit. You will also need to choose your creditors wisely and make lifestyle changes so you don’t end up in the same situation again. However, the process for getting good credit again can begin within weeks after your bankruptcy is discharged.
Bankruptcy Reflects Poorly on You
Again, while bankruptcy is not something that you desire on your credit report, the entire issue’s benefit to your situation is relative. Employers and creditors may look at your report and shy away, but some will acknowledge that you made the best financial decision you could with the resources you had. In any case, it looks no worse than years of unpaid debt and collection accounts. Further, bankruptcy is often less stressful than dealing with creditors and attempting to pay bills you can’t afford. We can help you figure out if bankruptcy is the right choice for you. Call (813) 940-5120 for a free initial consultation.
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