Filing for bankruptcy is never something that people do willingly. It requires that debtors accept the financial trouble that they have found themselves in, and take radical action to work toward a debt-free life. While this is never an easy choice to make, it is often made harder by widely spread myths about bankruptcy.
When considering whether to file for bankruptcy, it is important to apply critical thinking to the situation and consider whether some of the things you have been told are really true. The following are some of the most commonly spread myths about the bankruptcy process.
Your credit score will never recover
It's true that your credit score will suffer as a result of filing for bankruptcy. However, what is not true is that it will never recover. You can expect to have your credit score be affected by your bankruptcy filing for around seven to 10 years. But after that, it will almost certainly have fully recovered. In addition, the financial benefits that you will be subject to as a result of the bankruptcy filing will likely overweigh any credit score decline.
You have failed yourself and your family
Historically there has been a stigma around bankruptcy, and many people have, unfortunately, felt ashamed to tell friends, family and coworkers about their bankruptcy filing. However, there is no shame in taking action to live a debt-free life. By doing so, you will be able to give your loved ones a better quality of life, without the stress and strain of overshadowing debts.
You will lose all of your possessions
One of the most common myths around bankruptcy is the belief that a debtor will automatically lose all of their possessions, including their home. The number of assets that you will need to give up will depend on the Chapter of bankruptcy you are filing for, but you will never lose everything that you own. In many cases, it can be possible to keep your home, especially if you are filing for Chapter 13 bankruptcy.
If you want to learn more about how bankruptcy could help you to live a debt-free life, it is important to understand the different bankruptcy Chapters.