Many people are reluctant to file for personal bankruptcy. Some can feel like doing so admits failure while others might be worried about what their peers will think of them. If you’ve been thinking about declaring bankruptcy, learn about some of the most common fears associated with bankruptcy and why you shouldn’t worry about them.

4 of the Biggest Fears of Filing for Bankruptcy Explained

1. You Won’t Be Able to Get a Loan for 7 to 10 Years

Just because bankruptcy appears on your credit report for several years doesn’t mean that it will always hinder you from getting a credit card or a car or mortgage loan. Filing for bankruptcy can actually improve your credit score within the first year or two since most of your debts will be cleared and creditors will stop marking your unpaid bills. Once you start using a secured credit card, you may be surprised at how quickly your financial situation improves.

2. Your Friends, Family, or Coworkers Will Find Out

While bankruptcy cases are included in public court records, your peers would have to be actively searching to find yours. Only especially noteworthy personal bankruptcy cases are reported by news outlets. Unless your friends and family regularly read the court files, they’re unlikely to find out about your case.

3. You’ll Have to Turn Over All of Your Belongings

The majority of personal bankruptcy cases don’t require the debtor to turn over personal belongings. You can even work with your attorney to convert some of your nonexempt property to exempt; for example, by putting cash into a requirement account.

4. Your Creditors Will Continue to Harass You

Before you file for personal bankruptcy, your creditors can garnish your wages or seize your property. After you file, they can no longer attempt to collect money from you. While creditors have the option to appear in court, most choose not to do so.

Seek guidance through the personal bankruptcy process from Donald L. Spafford, Jr., Attorney at Law, in Honolulu, HI. With more than 30 years of experience, this bankruptcy attorney is well-equipped to understand the intricacies of your case. Schedule a free consultation today by calling (808) 532-6300, or learn more about the firm’s practice areas by visiting the website.