Bankruptcy Myths

Moral guilt has no place in this decision to file bankruptcy. It is strictly a financial decision. Humans make bad decisions. Life changes for everyone during times like this when so many businesses have closed their doors leaving the employees out in the cold.

And even if you think you have planned really well for everything,

illness can strip you of all your savings really quick. And insurance companies have a way of canceling your insurance when you need them the most or they don’t cover everything, which becomes costly.

Our forefathers knew there would be hard times now and again for Americans and, therefore, they provided for bankruptcy in the Constitution. That was real foresight.

Wars have sent many into poverty. People have been wrongly arrested and lost everything.

There is a huge difference in people who are trying everything they can to keep up with their bills and those who are deadbeats. About 1in 75 households in America have a member who has filed bankruptcy.

Credit card companies gamble hoping you will run your bill up so they can charge you late fees and higher interest. College graduates start receiving offers immediately. Low income households and the mentally disabled are most often targeted. Now that is morally questionable. Wouldn’t you say?

Honest tax payers are most certainly not footing the bill for those who file bankruptcy.

Most people who declare bankruptcy are neither cheats nor undesirables. Most people do not file because they want to. They are in a corner and have to. It could happen to anyone no matter the class, living standards, occupation, income, or apparent financial conditions.

Another myth is that you lose everything if you file bankruptcy. That is not true. The law provided for certain exemptions. The courts realize people must go on after bankruptcy. The bankruptcy law is governed by a “fresh start” philosophy. It does not setout to penalize or punish the debtor, but to give the debtor a chance to rehabilitate.

If you can prove you have the money to pay, you cannot be denied credit after a bankruptcy. But be careful about buying directly after a bankruptcy…your bankruptcy could be revoked if they think you were pulling a fast one filing.

Bankruptcy gives you a chance to create a better life…a second chance. What you do with it depends on if you learned anything from all you have been through. Take it easy. Think! Think about where you want your future to go and how to get there. Make it a point to study the situation and how to create your budget.