The Most Common Myths Of Bankruptcy
Bankruptcy is one of the most difficult financial issues to understand, mainly because so many people do not learn about bankruptcy because they think that bankruptcy will never affect them. The truth is that anyone can be affected by a bankruptcy during their lifetime and the best way to navigate the situation is to know about the terms and procedures that will be used in the bankruptcy proceedings. There are many common myths about bankruptcy that are routinely accepted at fact and knowing what these myths are can help you make the right decisions about bankruptcy.
Myth – Only Poor People Declare Bankruptcy
Many people believe that only poor people and failing businesses declare bankruptcy. The truth is that bankruptcy affects people in all income brackets. Many of the individuals that choose to declare bankruptcy because of their current financial situation are considered to be middle-class, making more than $60,000 per year, and have reasons for filing for bankruptcy that vary widely from person to person. There is no way to predict who will be affected by bankruptcy during their lifetime and who will not.
Myth – All Bankruptcy Cases Are The Same
There is no ‘one-size-fits-all’ solution to bankruptcy cases, so every person’s experience with bankruptcy is going to be different. Some individuals may find that their bankruptcy proceedings go easily, with few problems and a clear solution at the end of their case. Other individuals may find their bankruptcy proceedings difficult and complex, often eliminating much less of their debt than they believed would be eliminated at the beginning of the process.
Myth – Bankruptcy Gives You A Clean Slate
Many people believe that filing for bankruptcy will eliminate all of their debt quickly and that they can get back to their normal habits quickly afterwards. What these individuals do not realize is that there are certain types of debt that cannot be eliminated through bankruptcy, such as child support debt, student loans, and alimony. If these financial obligations make up the bulk of your debt, bankruptcy will not be much help to you.
Myth – Bankruptcy Destroys Your Credit Score Forever
Everyone knows that having a bankruptcy on your credit score is not a good thing, but many people blow the effects that a bankruptcy entry will have on your credit report out of proportion. A bankruptcy entry on your credit report will remain visible to potential creditors for ten years, but you can begin repairing your credit immediately after your case has been closed. In many cases, the individuals that declare bankruptcy already have low credit scores from months or years of missing payments and struggling to make payments on time and are able to return to their pre-bankruptcy credit score in a relatively short time period.
- Sunday Money Madness - Can you buy an entire chess set in a pawn-shop? Just another Sunday roundup here at RCDL. Here's what I found interesting around the blogosphere this past week: Credit and Debt Credit Karma has a slew of excellent posts on credit, here's one I thought readers would enjoy: The Biggest Four Credit Mistakes. Stop Buying Crap writes Got Debt from......
- Web Site Promotion And Search Engine Marketing Instruments Many of us be aware that just about every owner of an internet site really wants to create targeted visitors. In relation to building site visitors it can be done in numerous tactics. The most famous and simple from the options for making traffic is because they build hyperlinks aiming......
- How A Cash Advance Can Help Your Credit Score People are concerned with their credit scores, but few realize how a cash advance can radically alter their financial outlook. When bills pile up, it makes good financial sense to consider a payday loan. By getting bills paid, establishing a good credit history, and demonstrating financial discipline, a cash advance......
- The Truth about Credit Cards and Debt pt 2 This is part two to a series on credit cards and where our country is heading when it comes to credit card debt. In the previous post in this series we talked about some of the statistics in the credit industry and how to interpret them to get an idea......
- What does the Credit CARD Act mean to the average person? The credit CARD Act of 2009 just went into effect as of Feb. 19, 2010. It will affect the credit card companies in a big way, as well as consumers. The major credit card companies say that they will lose as much as half a billion dollars each this year......
