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4 common myths about bankruptcy

If you find that you are drowning in debt you can't pay and can't see a way out, bankruptcy may be a valuable option for you to consider to stabilize your financial future. Bankruptcy can provide you with a fresh start and clean slate after things outside of your control have spiraled, dragging you down.

According to the United States Courts, in 2015 close to 900,000 consumers benefited from filing for bankruptcy and reorganizing or discharging debt. While many benefit, some avoid bankruptcy because of the negative ideas associated with it. Debt can be stressful and overwhelming, but discharging debt can provide serious relief. The following are common myths about bankruptcy debunked and disproved.

Filing for bankruptcy makes me irresponsible

This is a common myth and a stereotype that many consumers face when considering the process. While there are some who file simply because they were irresponsible, others may have fallen on hard times due to things outside of their control. Losing a job, being diagnosed with a serious illness or going through a divorce are all things that can contribute to debt that becomes unmanageable.

Bankruptcy gets rid of all my debt

While some debts may be forgiven or discharged when you file, others must still be paid. Domestic support obligations, student loans and tax debts are just a few examples. Fortunately, getting rid of your other debts may make it easier to meet these obligations each month.

Filing will ruin my credit forever

Once you've filed for bankruptcy, it may only be a month or two before you start receiving offers for credit cards in the mail. In fact, it is often recommended that those who file should get a secured card with a small limit fairly quickly and make regular on-time payments to build credit back up.

Bankruptcy is an easy solution to a complicated problem

While bankruptcy can definitely reduce some stress and worry, it is not a cure-all to your financial woes. When you file for Chapter 7, you may have to give up some property. With Chapter 13, you may keep your property but make payments for three to five years to catch up. Fortunately, bankruptcy allows you to organize your debts in a way that fits your income.

If you need some professional perspective and a start to a brighter financial future, filing to discharge your debts can be an ideal first step on your journey. Consulting an attorney can help you determine if filing is the right choice for you.

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