We have read numerous articles like ‘5 tips to save money’, ‘10 steps to pay off your credit card debt’, ‘15 tips to recover from recession’, and blah, blah, blah but not ‘Bankruptcy’. Okay, quite motivating and entertaining articles. In fact, many of us actually saved enormous funds with the help of these sermons. However, it’s not possible for every individual to save a fortune or even come out of debts. And if they attempt, the poor economic conditions, rising unemployment rate, and inflation would not let them succeed.
With debt, comes the non-detachable disgrace and the coyness of seeking help. It’s obvious that people seek shelter under the only alternative visible to them. And that’s Bankruptcy. I know you endeavor filing bankruptcy because you did everything you could to get out of debts. However, there are several misconceptions among people about this horrendous solution.
Your home would be sold
People believe that their sweet home would be sold to recover the money that they owe to the creditors. Not if you have filed Chapter 7 or 13 of Bankruptcy. It is an agreement that helps you to retain the house ownership if you regularly repay the monthly mortgage amount without delay. It cannot be seized under any law if you are a persistent payer and have the respective chapters filed.
You could lose your job because of Bankruptcy
Firstly, it’s callously unethical from the employer’s point of view to fire an individual filing for bankruptcy. Secondly, if your boss chooses this unethical path, the law will not permit him to. The Federal Legislation is accountable for the loss incurred by you due to such uneven job loss. The employers are permitted to glance at your credit scores but not for performance judgment based on your financial health.
Filing Bankruptcy will relieve you from all the debts
This is the most familiar myth about bankruptcy. Ok, I agree that it help to purge most of your debts but not all. There are many other debts owed by you that are not covered by Chapter 7 or 13. After filing for bankruptcy, you are liable to pay every penny of unpaid federal (or applicable state) taxes, educational loans, and all the debts arising out of fraud.
You will not get loans any more
Alright. You would want to argue with me on this point. How can anyone provide you credit if your credit score is worse than most of the US population? The only way to still receive a loan is by being resilient and patience. Most financial institutions will obviously be reluctant to lend you even a dollar if you have declared bankruptcy. However, their credit policy doesn’t necessarily mention such law. There are chances that you may receive credit if you keep striving. It’s difficult but definitely not impossible.
You are left alone
This is a feeling that most of the people absorb after filing for bankruptcy. However, most of it is caused by your personal behavior. You are quite depressed answering creditor calls, looking at huge bills that cannot be paid, and dealing with rejection of loan applications. But remember, you are not alone. There are financial advisors who not only assist you in your financial lethargy but provide support to recover from the depression.
These myths will do no good except making you feel further miserable about your condition and will break you morally. Things are possible if you have the nerve to do.