Of course, when you don’t know anything about bankruptcy,
or, worse, you have read inaccurate stuff online.
Thanks to my friend Cathy Moran for the idea for the theme today.
Filing Bankruptcy Means I Failed
Well, lots of people filed bankruptcy who are considered great successes. Walt Disney and Larry King, for two.
Nothing is more American than giving someone a second chance, and that is what bankruptcy does.
Guilt or shame is voluntary, if you want it. It is NOT part of the process.
Most bankruptcy filings are caused by events outside the control of the consumer, that is, you.
Illness, layoff, failed business, either yours, or, your employers.
Yeah, some people just borrow too much money, but, why did the creditors lend it to them?
Bankruptcy filings correlate with consumer debt. When lending goes up, so do bankruptcy filings.
I Will Never Have Good Credit Again!
What everyone asks. When will I be able to borrow money again?
Not that it is something we should do, but.
Everyone is a better credit risk AFTER filing bankruptcy and discharging debt, than before.
Think about it.
If you are considering bankruptcy, that means you do not have enough money to pay the debt you have now.
No one will lend you more money if you cannot afford to repay the debt you already have.
And, you cannot file Chapter 7 bankruptcy again for 8 years, so, the creditor knows, you will not be able to discharge a debt in that time.
Will you pay higher interest than if you had not filed bankruptcy?
No, not really, because, if you had not filed, you would still have all that debt.
Everyone Will Know!
Well, filing bankruptcy is a public record in a federal court.
But only your creditors and some government agencies, like the IRS, are notified of your filing.
Anyone else would have to look it up. Why would they do that?
What is really scary is, not filing bankruptcy when you have no way to repay your debts, when you are facing foreclosures and repossessions and garnishments.