Even though bankruptcy rules may have changed, consumers continue to believe a number of persistent bankruptcy fallacies, particularly regarding their credit. Here are some bankruptcy misconceptions and what you need to know:
I'm Not Embarrassing Myself By Filing for Bankruptcy
Many consumers who sincerely need the assistance bankruptcy can provide to restore their financial and credit standing are prevented from filing by their own fear of how others will perceive them. Bankruptcy is a private matter that is frequently necessitated by life-altering events, such as a divorce, death, loss of employment, or severe medical condition. People who fall behind on bill payments due to major life changes frequently are unable to catch up, thereby jeopardizing their relationship with creditors, credit rating, and financial stability. The decision to declare bankruptcy should not be taken carelessly, but it should not be avoided solely for social reasons. If financial assistance is required, there is no dishonor in attempting to assist yourself.
The bankruptcy of my spouse will destroy me.
It is feasible for married couples to file bankruptcy individually. If one spouse has incurred debts in their own name that are not shared with their partner, they can file for bankruptcy relief without harming their partner's credit. However, if debts are incurred jointly, both parties must file bankruptcy or the creditor will pursue repayment from the spouse who did not file. The longer unpaid debts remain outstanding, the greater the damage to your and your spouse's credit rating.
Insolvency Will Eliminate All of My Debts.
Many consumers misunderstand the true purpose of bankruptcy, mistaking it for a method to clear their credit's reputation and avoid facing the payment obligations they have incurred. If you declare insolvency to avoid meeting your financial obligations, you have committed fraud. Today's bankruptcy courts will be able to distinguish between those who are genuinely working to resolve a financial crisis and those who are seeking an easy way out.
My Credit Rating Has No Future
Many individuals who contemplate bankruptcy believe they have nothing to lose because they will never be able to rebuild their credit. This is certainly not the case. All consumers, including those filing for bankruptcy, can and should continually strive to repair their credit. Consumers must be aware that soon after filing for bankruptcy, their mailboxes will be flooded with solicitations for credit. Most of these offers will be from subprime lenders or credit card companies claiming to be able to help you rehabilitate your credit, but you'll be paid much more than other consumers and will likely have interest rates you can't afford right after a bankruptcy.
My Credit Will Be Exceptional Due to Filing for Bankruptcy
People who believe their credit score will increase automatically because their debts have been discharged are in for a rude awakening. A consumer's credit history is affected differently by bankruptcy than by other creditor information. A bankruptcy will now appear on a credit report for an additional three years, for a total of ten. This will be reflected to lenders in the distant future, who may be unwilling to take the risk of extending credit or money to you. If you are unable to obtain a credit card or other financing, it will be difficult to restore your credit, and your score will not increase despite your 'lack' of debts.
Again, bankruptcy is a highly individualized option for debt relief, but it is not always the best choice. Before declaring bankruptcy, you must ensure that you have exhausted all other options for repaying your debts and improving your credit standing.
" - https://www.affordablecebu.com/
