Bankruptcy protection can help those who are struggling with debt come out on the other side. Yet, some of the misconceptions around the practice can be off-putting.
Here are three misconceptions you shouldn’t let prevent you from getting help.
1. You can’t come back from bankruptcy
One of the biggest reasons people are afraid to file for bankruptcy is because they fear their credit score will be irreparably damaged. This is not true!
You’ll learn money management skills from filing for bankruptcy. These can help rebuild your credit score over the next few years.
2. Everyone will know you filed
Although bankruptcy is a matter of public record, it’s unlikely that your family, friends and neighbors will access the news. Unlike foreclosures, your local paper will not announce your bankruptcy.
The only way the general public may choose to access the record is through a complex process that requires sorting through all of the bankruptcy filings in the country. The public access system that stores these records is called PACER.
Unless you have given your peers reason to go searching, you can feel confident that your co-workers and friends won’t be aware of your bankruptcy filing unless you choose to share the news with them.
3. You’ll go bankrupt again
If you file for Chapter 13 bankruptcy, you’ll learn to adopt positive money management habits. This is because Chapter 13 bankruptcy requires the person who files to repay their debts over a period of three to five years. With these skills in your back pocket, you’re likely to handle your finances responsibly as time goes on.
It’s also important to remember that bankruptcy can happen to anyone, especially under unexpected or unusual circumstances, such as job cuts, an illness in the family or a hiccup in a business venture. No matter what has gone wrong, bankruptcy is an option that’s available to help!