When the mail arrived today, was there another overdue notice? Did you avoid answering the phone because you knew it would be a creditor? How many times have you thought about bankruptcy - anything to get out from under the crushing weight of your debt - only to dismiss it out of fear?
Many people have perceptions about declaring bankruptcy that cause them to reject the idea. Some common myths include:
- Bankruptcy won't help because I have too much debt.
- Bankruptcy will ruin my credit score.
- My family will lose respect for me.
These misconceptions may cause people to put off taking a viable step toward peace of mind.
Too much debt
No matter how much debt you have, there is an option for you. You may qualify for Chapter 7, which will eliminate almost all of your debt. Your attorney will manage your assets and distribute them to your creditors. This may involve negotiating lower balances or easier terms on what you owe.
Chapter 13 bankruptcy is a reorganization of your debt. You may be able to hold on to your estate as your attorney works out payment options with your creditors.
No matter which plan works for you, there is a good chance you will begin to feel the burden lifted from your shoulders soon after the process begins.
A ruined credit score
Bankruptcy is not a decision to make lightly. However, if you have struggled with your bills until you are weary of it, the one thing holding you back may be the hit your credit rating will take.
While it is true that a bankruptcy is a negative mark on your credit score, that mark disappears after 10 years. During that time, you can be rebuilding your financial security by establishing a careful budget with your newfound freedom from debt.
Loss of respect
It's hard to disregard the opinions of people we love. If you are afraid of what people might think of you if you declare bankruptcy, you have a legitimate concern. However, you may be projecting on them your own fear of failure. If your financial situation is costing you sleep, interfering with your personal relationships or wrecking your health, the opinion of others doesn't matter.
Surviving the personal turmoil
Declaring bankruptcy may be an emotional decision. Many times, people find that the choice damages their self-esteem. They lose confidence in their ability to manage their affairs.
If this sounds like you, know that a compassionate attorney understands that you are worth more than your bank account, and he will help you deal with your finances during and after bankruptcy. A lawyer with bankruptcy experience knows that no one is immune from financial setbacks - even those who plan carefully.