The term bankruptcy can bring about many emotions such as fear, inadequacy, stress and relief. Like grieving the loss of a loved one, filing bankruptcy takes someone through a gamut of these emotions and more. It’s true that filing bankruptcy has a large impact on your life, but there are also some common, widely held beliefs that may cloud your judgment .
Only Financially Irresponsible People File for Bankruptcy
This belief may be true in some cases, but not all. People experiencing some form of hardship are more likely to file. The factory worker who always paid their bills early may file because he was laid off six months ago and hasn’t found employment since. Likewise,the recently divorced may file to pay for the divorce and relieve joint debts.
Another common hardship is being crippled by unexpected medical bills due to surgery or an accident. Common hardships such as these can happen to anyone and bring them to this path.
All Debts are Discharged after Filing
Some debts will be discharged depending on which Chapter you file for but not all. People who file bankruptcy in Mississippi will still be required to pay child support, alimony, and certain taxes. Any debt not listed on the bankruptcy petition won’t qualify for discharge and neither will student loans. Discharging student loans is a separate matter from bankruptcy and requires documented proof of undue hardship.
Bankruptcy Ruins Your Credit for Life
It is true that for ten years after filing bankruptcy, it may be documented on your credit record. However, it will not necessarily ruin your credit forever. With the fresh start bankruptcy gives you, your credit may be in better shape than before.
You’ll likely receive credit card applications in the mail shortly afterwards. Secured credit cards with low limits are a great option to start rebuilding your credit. Just be sure to pay them on time, and preferably pay more than the minimum payment.
With all the negative perceptions surrounding bankruptcy and those who file, it’s normal to be hesitant. However, if consolidating debts or receiving debt counseling doesn’t help, then bankruptcy is your best option. To learn more about how Bosserman Law can help you reach a favorable outcome, give us a call today.