One of the biggest reasons why so many debtors fail to file bankruptcy as soon as they need it is because they are often paralyzed with fear about the bankruptcy process and the effects that bankruptcy will have on their life.
Below are four reasons why debtors dealing with debt issues shouldn't fear bankruptcy:
- Bankruptcy is not a process which lasts a long-time in most cases. The average debtor filing Chapter 7 bankruptcy will be in and out of bankruptcy in only a few months. Even if they debtor files Chapter 13 bankruptcy , the process of setting up and getting approval for the repayment plan is usually a few months. Of course repaying the debts in Chapter 13 bankruptcy can last anywhere between 3 to 5 years.
- The bankruptcy trustee and creditors are not coming to your house to seize your personal belongings. While some celebrity/millionaire bankruptcy cases may involve the liquidation of some personal property in bankruptcy, most ordinary debtors never face this type of situation. With the generous amount of exemptions available, ordinary debtors keep most, if not all of their personal belongings in bankruptcy.
- Some debtors fear that filing bankruptcy will cause creditors to refuse to do business with them in the future. As we have said many times before, creditors are in the business of making money. Even if you filed bankruptcy on a creditor, they may still be willing to do business with you after you exit bankruptcy.
- Debtors also fear that filing bankruptcy will create a lack of access to bank accounts and other financial instruments. Unless you are overdrawn on your checking account, filing bankruptcy won't cause most lenders to close your bank account. Also, filing bankruptcy does not automatically disqualify you from being able to open other bank accounts in the future.