The topic of bankruptcy can be touchy, and many are ashamed to discuss it. As financial woes continue to grow, many look to bankruptcy as a way to ease their money burdens. Although common, there are many myths surrounding bankruptcy, and many people do not consider it an option until their situation becomes dire. Individuals who are struggling to get out of a financial hole should definitely research the options that bankruptcy can provide, before it's too late.
Many believe that their credit will be ruined if they file for bankruptcy. This isn't necessarily true. What many don't consider is that their credit is already damaged due to the fact that they have not paid many of their debts. This is the point in which bankruptcy should definitely become an option, as it allows you to gain control of your finances and is a starting point in helping you rebuild your credit history.
While Chapter 13 bankruptcy does not eliminate your debts, it does allow you to negotiate your payment options. You will be able to repay your creditors, thereby living up to your obligation. Being able to pay your debts instead of having them thrown out will make you look much better in the future.
Another widely held belief regarding bankruptcy is that all the money you have saved will be lost. This is a natural assumption, though not necessarily true. If you have a substantial amount of money put away, it should really be used to pay down your debts, but if it hasn't been, it could be up for grabs. But there are other saving accounts that are exempt from the bankruptcy process, such as retirement accounts, and educational savings you may have acquired for your children or grandchildren. It is important to know that courts will not take every asset into account, and you won't lose everything. If you have doubts about your savings accounts it's important to contact a lawyer to get clarity on whether or not those accounts would be considered.
One topic that is a bit shaky where bankruptcy is concerned, is foreclosure. The issue of foreclosure can go either way when dealing with bankruptcy. Depending on bankruptcy to stop the foreclosure process is not your best bet, as it may only be delayed. It is best to put a stop to foreclosure before it even happens, as relying on bankruptcy to help you out of it can be a gamble. If you've reached the point where your home may go into foreclosure, while Chapter 13 may not stop it, it can at least help you get your other debts in order and allow you to focus on preventing foreclosure. You can potentially work out feasible terms with your lenders while still paying your mortgage.
Seeking professional help is always necessary when dealing with a bankruptcy. You may find that the process you fear is your best bet as far as getting your finances in order and building long-term success.
Many believe that their credit will be ruined if they file for bankruptcy. This isn't necessarily true. What many don't consider is that their credit is already damaged due to the fact that they have not paid many of their debts. This is the point in which bankruptcy should definitely become an option, as it allows you to gain control of your finances and is a starting point in helping you rebuild your credit history.
While Chapter 13 bankruptcy does not eliminate your debts, it does allow you to negotiate your payment options. You will be able to repay your creditors, thereby living up to your obligation. Being able to pay your debts instead of having them thrown out will make you look much better in the future.
Another widely held belief regarding bankruptcy is that all the money you have saved will be lost. This is a natural assumption, though not necessarily true. If you have a substantial amount of money put away, it should really be used to pay down your debts, but if it hasn't been, it could be up for grabs. But there are other saving accounts that are exempt from the bankruptcy process, such as retirement accounts, and educational savings you may have acquired for your children or grandchildren. It is important to know that courts will not take every asset into account, and you won't lose everything. If you have doubts about your savings accounts it's important to contact a lawyer to get clarity on whether or not those accounts would be considered.
One topic that is a bit shaky where bankruptcy is concerned, is foreclosure. The issue of foreclosure can go either way when dealing with bankruptcy. Depending on bankruptcy to stop the foreclosure process is not your best bet, as it may only be delayed. It is best to put a stop to foreclosure before it even happens, as relying on bankruptcy to help you out of it can be a gamble. If you've reached the point where your home may go into foreclosure, while Chapter 13 may not stop it, it can at least help you get your other debts in order and allow you to focus on preventing foreclosure. You can potentially work out feasible terms with your lenders while still paying your mortgage.
Seeking professional help is always necessary when dealing with a bankruptcy. You may find that the process you fear is your best bet as far as getting your finances in order and building long-term success.
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