In any given state, almost 3,000 Americans commit to filing for bankruptcy. This may leave your jaw dropped, wondering what these people are doing wrong in their lives that led them to this tragic step in their lives.
Almost everything you know about bankruptcy is dead WRONG!
That’s right. The common belief that bankruptcy is the end of your financial life. You’ve hit rock bottom, you lose everything you have ever worked for in wrong – none of that is true. In fact, in many cases, bankruptcy is the first-step to starting your financial life all over again.
Through this article, my hopes are to show you exactly why declaring bankruptcy is not as bad as you think it may be. I also plan to explain exactly why, and when declaring bankruptcy might just be the best decision that you can make for your financial well-being.
When It’s Next to Impossible to Keep Up with Your Debt
The problem with debt is that once you get in – being able to get out is a real struggle. Both financially, and mentally. When securing a business loan, a lot of banks won’t tell you this.
But it will be clearer to you when you begin to receive those surprise calls, where you are scrutinized, and questioned regarding where your payments are.
The inability to do anything with your hard-earned money without guilt pressing down on your shoulders. The constant fear that your assets such as your car, or even your home will be repossessed.
Filing for bankruptcy takes all of this away.
Isn’t that amazing?
But What About Your Credit Record?
The common misconception is that filing for bankruptcy paints a permanent label on your credit record. But studies show that more often than not, credit scores take a sharp turn for the good after filing your bankruptcy forms.
The worst part about getting these calls?
Courtroom cases, and garnishments start to go on the rise. Which costs you even more money, putting you further behind on your bill. But when you file for bankruptcy, this all goes away thanks to a nifty little benefit known as an “automatic-stay.”
Some Of Your Debts Disappear Entirely
Paying off your accounts is like playing a dicey game of dominoes. As soon as you fall behind on one, it seems that the rest are close to follow. From medical expenses, to mortgage, car loans, and the list goes on.
But what you may not know…
Filing for bankruptcy actually completely eliminates some of the debt that may be under your name. Including things such as:
- Credit card debt.
- Medical debt.
- Personal loans.
- Overdue rent and utility bills.
- Some of your older tax collection calls.
Which means you can turn your attention to higher-interest debt that is keeping your money tied up in never-ending payments.
You Risk Throwing Good Money in Debt Until You Have Nothing Left
When you owe money, if you’re anything like me you probably hate the idea of not being able to pay it off. But sometimes life just gets us with a right-hook that floors us. And you need to focus on getting yourself back onto stable footing.
The problem is…
Almost 60% of those in debt wait far to long to commit to their decision to file for bankruptcy. Without the protection that this provides, your long-term accounts such as retirements can be drained, which are otherwise protected once you get the bankrupt status – see the grass can be greener on the other side.
Important Things to Remember When Filing for Bankruptcy
You will need to find the money to hire a bankruptcy attorney. It sucks, I know. When you got so many expenses – you’re probably thinking, “Well, there goes that idea.”
But at the end of the day, your lawyer will save you a fair portion of your hard-earned cash within the first couple of months – making them worth every penny.
Lawyers are smart by habit. Hiring them to declare bankruptcy means you will need to pay them upfront (after all, no one works for free, right)
The most difficult part about filing for bankruptcy is the complicated paperwork behind the process. Thankfully, with a lawyer you don’t need to stress about the technicalities, or more importantly – making mistakes that could leave your assets at risk.
Your Credit is Going to Tank
Unfortunately, there is no dismissing the fact that you are unable to pay for your bills when you file for bankruptcy. Which is why you should anticipate your credit score plummeting.
But as you discover how to free up some money to pay off essential debt, you will slowly start building your credit up again, which over time will improve your credit score – making your financial status far less risky. This, when done right will make it easier to invest in a new home, buy a car, and open up various accounts.