Financial problems can plague anyone at any time. When the unexpected happens and your income changes, you may no longer be able to support the expenses that you currently have. When that happens and those financial expectations become unattainable, you might want to consider filing for bankruptcy. However, if you are like many people, you might be hesitant. Here's a look at what you need to know about bankruptcy to help you determine if it's the right choice for you.
Bankruptcy Doesn't Make You a Bad Person
Despite the negative connotations of bankruptcy, it is a valuable tool for those who are financially in over their heads. Unfortunately, many people shy away from filing for bankruptcy when they really need it because they believe that it reflects poorly on them. They believe that bankruptcy would make them a bad person, not only in the eyes of potential creditors but also in the eyes of future landlords, family members, and others.
The truth is that bankruptcy is far more common and socially acceptable than you might think. While it will affect your credit for a while, you'll have the chance to start over and rebuild your credit sooner than you might think. And, since it's become more common, most people don't think twice about someone having to file for bankruptcy anymore.
You Don't Have to Lose Everything
The idea of bankruptcy often triggers thoughts of losing absolutely everything, from your home to your car and everything in between. The truth is that you won't necessarily have to give up everything you own to file for bankruptcy. There are provisions in place for keeping certain assets even if you're filing for bankruptcy. You'll have to be able to prove that you can afford the payments on the asset in question, but you may be able to retain certain assets in your bankruptcy case.
You Have to Be Realistic
If you're opting to file for bankruptcy, one of the things you need to keep in mind is that you need to be realistic about what you can and cannot afford. When you work through the bankruptcy process, especially if you opt to restructure your debts, you'll need to be realistic about what you can afford to pay. Committing to a payment schedule that's still beyond your means isn't going to help you. If you fall behind on the payments, you may find your bankruptcy in default. Take the time to talk with your bankruptcy lawyer about the options that best suit your budget and your needs before you commit to anything.
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