Bankruptcy is one of those topics that most people who go through it or have gone through it in the past, are not eager to discuss. After all, the bankruptcy likely came at a point in the person’s life where they felt they had nothing else to do but seek help from our justice system. It is not embarrassing and if you knew the statistics, you might be shocked at just how common it is.
Bankruptcy ruins everything
This is tied to what we discussed above. Certain people–especially those who had zero or little understanding of bankruptcy, what it is and how it works– hear the word and jump out of their seat. They do not understand what it is. It is a mechanism to help consumers, in this case, and it works well.
Bankruptcy is only for the irresponsible
Because people view bankruptcy as a last-ditch effort to pay off their debt, the person in question might look like they do not know how to manage finances. However, many people find themselves in emotional distress for reasons that has nothing to do with lack of responsibility. Even those who spent the money in the way the most people think probably did not understand what they were doing, hence arriving at this juncture.
Filing your bankruptcy will ruin your credit forever
Bankruptcy will affect your credit, but not forever. You will recover from this and many people rebuild their credit whin 5 years. By adopting intelligent advice from trustworthy sources, you can get a handle on your finances before making the same mistakes.
You can only file for bankruptcy once
This myth is quite common and we are not sure where it came from, but the answer is no. You do not get one shot and one shot only in your lifetime, though there are specific waiting periods depending on the type of bankruptcy you file.
Understanding what bankruptcy is and differentiating fact from fiction is crucial when you are thinking of making choices that will result in significant and substantive changes to you, your family, and for a certain length of time.