Bankruptcy has created stereotypical views of consumers who file for protection. While each situation is different, you should not let rumors, misconceptions, or false presumptions steer you from learning the facts about filing. There are people who have been known to be careless about their finances and seek protection. Yet, most cases do not include consumers of this nature. In fact, there are myths people hear that make it seem as if only certain types of people file or really bad things happen after you file. The following points shed light on common myths about filing Bankruptcy that you may want to review with a bankruptcy expert for better clarity.
Myths About Filing Bankruptcy
Only people who don’t know how to manage their money file bankruptcy. This is false as some of the most successful individuals and businesses use bankruptcy to help them restructure their finances. For many filers, changes in the economy, increased living costs, and even family events (job loss, death, divorce, etc.) have made it more difficult to keep up with necessary expenses.
If you file for bankruptcy it will be harder to recover financially. There are creditors willing to give you another chance at rebuilding your credit after bankruptcy. You can start small with a secured credit card and work your way up to a vehicle or house. It is a matter or planning and knowing reputable sources that can help you.
All of your debts can be eliminated in bankruptcy. This is false since certain debts are non-dischargeable. Priority debts such as recent income taxes, alimony, child support, and criminal fines will still be the responsibility of the debtor after their case is completed. Filing may help make it easier to make such payments.
People with college degrees hardly file for protection. A college education doesn’t make you immune to becoming bankrupt. A study from 2011 completed by the Institute for Financial Literacy showed college educated individuals saw a 20 percent increase in seeking bankruptcy protection 5 years prior to the study being conducted.