You may never want to think about bankruptcy even if you can’t afford to pay your bills. This is because of the belief that you will lose everything or damage your credit score permanently. There is also the fear of hurting your chances of finding a good job, tarnishing your reputation, or letting the public know that you’re bankrupt. Filing for a petition, you believe, will just make things worse.
The truth is, it is not entirely a negative thing. You just have to know the facts.
Improved Financial Situation
While it is true that bankruptcy hurts your credit score, it can help improve your financial situation over time. One common misconception about it is losing everything or starting a life over in a cardboard box. Bankruptcy laws vary from one state to another, but each one has exemptions over certain types of assets. In fact, it may allow you to keep certain properties and discharge personal liability for most debts.
Not Everyone will Know
Despite the fact that it is a legal proceeding, bankruptcy lawyers in Salt Lake City note that not everyone will know about it. There are many people filing for bankruptcy, so not every publication is willing to publish all the names or allot a space for all filers. Unless you are a celebrity or a prominent person, it is likely that your creditors are the only ones who will know about it.
You Can Still Get Credit
Bankruptcy negatively affects your reputation, but it is not true you’ll never get credit or no one will lend you money after filing. You may not know it, but there are lenders and companies that are willing to provide credit and loans. The thing is, most offer high-interest rates. This is why it best to avoid major purchases first or take it easy with spending to avoid debts.
The concept of bankruptcy is negative, but this doesn’t mean that it doesn’t have positive points. If you’re struggling with your finances, evaluate if bankruptcy is really necessary. It is best to consult a reliable bankruptcy attorney to help you with the process and start your life over.