After our previous post on success after bankruptcy, we felt it important to address the common fears and misconceptions associated with the bankruptcy process. The stigmatizing nature of just the ‘B word’ itself strikes fear in individuals, so much so that EU Officials are reportedly trying to banish it altogether in favor of the term ‘debt adjustment.’ So here are some of the most common bankruptcy myths and misconceptions.
Myth #1) Filing For Bankruptcy Means I Am Financially Irresponsible.
FALSE! There are many reasons people struggle financially to the extent where they need to file for bankruptcy – it may be no fault of their own, i.e.: through illness, divorce, or losing their job. But acknowledging there is a problem and seeking help through a
bankruptcy attorney or looking into bankruptcy courses – such as the ones offered by Affordable Bankruptcy Courses – is a great way to start. Such a positive, proactive mindset signals the start of a more stable financial chapter in your life.
Myth #2) Bankruptcy Permanently Damages Your Credit.
FALSE! Recovery is possible. It is a common belief that once you have filed for bankruptcy, you are officially ‘financially irresponsible’ and are doomed financially. It is thought that such a ‘blip’ on your financial radar means that there is no getting back to any kind of stable financial standing. But this is not the case – there are many actions you can do to avoid falling into the ‘bankruptcy black hole’; to come out of the other side of bankruptcy with a good, proactive plan to recover financially and build solid foundations for your fresh financial future. Budgeting, saving, credit scoring, correcting those errors on your credit report…there is an abundance of methods to help you get back on track. Start Fresh Today Plus has a large selection of tools and resources for those looking to rebuild their credit and start fresh post-bankruptcy.
Myth #3) I Am Employed, So I Can’t File For Bankruptcy.
FALSE! If your income is not enough to cover your debts, bankruptcy is still an option – even if you are employed. Chapter 13 bankruptcy is known as the “wage earner’s plan” as it is for those with a steady income who can slowly pay off their debts as opposed to having them entirely discharged.
Myth #4) Filing For Bankruptcy Will Cost Me My Job
FALSE! Firing someone because of their bankruptcy filing is ILLEGAL. If you either filed, were insolvent prior to a bankruptcy discharge, or have not paid any debt which was discharged during your bankruptcy, no employer can legally terminate your employment. Your spouse’s job is also protected, despite their association with you and your case.
Myth #5) I Am Married, So My Spouse Has To File For Bankruptcy, Too.
FALSE! If only one of you owes debt, then only one of you should file. If your debts are joint, that is a different matter. According to an attorney blog,if your debt is not joint, then your filing will have no direct impact on your partner’s credit, job prospects, or financial situation. This is because a debt is a contract between a creditor and a debtor, and each debtor signs to enter into the agreement to be liable for payment. Your debts are not also the debts of your spouse purely through association.
Myth #6) I Am Not In ‘Enough Debt’ To File For Bankruptcy
FALSE! There is no ‘debt limit’, or minimum debt requirement. According to an attorney blog, it is determined on whether you are able to repay your debts, if you could even discharge your debts during a bankruptcy, and if your creditors are willing to work with you on a realistic time frame for repayments. So it is not the amount of debt, but the nature of it – are your creditors pressuring for payment, and threatening to sue? Garnishing your wages? Trying to repossess your property? If you answered yes to any of these, bankruptcy may be a viable option for you.
For more detailed information on more bankruptcy misconceptions, stay tuned for our next blog post. Chances are, you are here because you are looking for financial help and are interested in potentially filing for bankruptcy. Affordable Bankruptcy Courses can help!
The First Step To Financial Recovery? Taking the required EOUST-approved Credit Counseling to kick-start your bankruptcy process. Available 24/7, in English and Spanish.