Being in debt is scary; but having your debts threaten the financial safety and security of your family can be even more scary. That's why it's not surprising that many debtors have many fears concerning a bankruptcy filing. Several myths feed into these fears; but the truth is that bankruptcy is often the only chance some debtors have to get out of debt and get onto the road of financial security. So how do debtors overcome their fears of bankruptcy?
Let's take a look at some of the facts:
- Many debtors fear bankruptcy because they mistakenly believe that a bankruptcy filing will ruin their credit forever leaving them incapable of procuring credit for the rest of their lives or at least for the next 10 years. The truth is that many debtors are able to rebuild their credit within a few years of filing bankruptcy. And some creditors even seek the business of debtors who have filed bankruptcy because they know that their income is no longer encumbered by a large debt load.
- Some debtors fear bankruptcy because they believe that they will lose all of their assets in the bankruptcy process. They envision a bankruptcy process that includes "officials" grabbing all of their precious belongings and auctioning them off the repay their creditors. The truth is that bankruptcy is designed to protect the assets of debtors. Bankruptcy can stop foreclosure , wage garnishments and levies from destroying a debtor's finances and future income.
- Many debtors fear bankruptcy because they imagine that it comes with humiliation because "everyone" will know about their bankruptcy and that they will be look down at. The truth is that while bankruptcy is a public record, it is not announced to your neighbors and friends. Also, so many famous and successful individuals have filed for bankruptcy that it has lost most of its stigma.