You might be considering bankruptcy but wondering how much truth there is in what you hear about it. It’s wise to make an informed decision on this form of debt relief based on facts. Here are a few myths that could help you decide whether filing a Chapter 7 or 13 bankruptcy is a good option for you.
What Is the Truth About Bankruptcy?
1. It’s Better to Pay Your Debts
Bankruptcy doesn’t solve everybody’s money problems, but for some people, it’s the best option. If you’re using more than half of your income each year paying debts and still won’t have them paid off within five years, filing Chapter 7 or 13 bankruptcy is likely to get you to debt-free status faster. While your credit score will take a hit, it’s easier to rebuild it on a clean slate after filing.
2. Filing Bankruptcy Is a Personal Failing
Filing bankruptcy doesn’t mean you are irresponsible or dishonest. Typically, people who file bankruptcy petitions have encountered serious problems. Many filers experience a job loss, divorce, or serious accident or extended illness or have unexpected medical expenses. Bankruptcy can relieve your financial and emotional stress during difficult times.
3. Bankruptcy Ruins Your Financial Future
Rather than ruining your financial future, filing bankruptcy can brighten it with a fresh start. Chapter 7 bankruptcy generally wipes out all unsecured debts without paying creditors. You might be able to obtain a secured credit card within a month after discharge. Making payments on time and in full improves your credit score and positions you for a traditional credit card within six to 12 months later.
It’s easier to decide whether to file bankruptcy when you cut through the myths and get to the truth. At The Gil Law Firm, clients receive all of the legal and practical information they need from knowledgeable and compassionate attorneys. Since 2000, residents in and around Dothan, AL, have depended on the firm for wise counsel and effective representation. Call (334) 673-0100 to schedule an appointment with an attorney, or visit them online for more information about bankruptcy law.