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The Stigma of Bankruptcy
Debt feels like prison. It is impossible to dig yourself out without going into deeper debt. Nowadays, there is a growing awareness about the hardships of credit cards, student loans, and medical bills. Paying hundreds in interest a month makes it impossible to save for a rainy day or make a meaningful reduction in your principal balances. Late payments because you can’t afford the high monthly payments feels like running in circles.
If this sounds familiar and you want freedom from the chains of debt, have you considered bankruptcy? The word ‘bankruptcy’ is moving away from its Monopoly-like perception. Truly landing on bankruptcy in the gameboard of your life means you get a fresh start…it doesn’t mean you lose everything. Debt is the prison and public perception is beginning to understand that about bankruptcy. Of course, there are lasting financial and legal consequences that your lawyers at Whitten & Whitten can help you navigate.
Most people who file bankruptcy are average Americans who want a simple, happy, healthy life for their family. Sometimes, devastating life events can cause overwhelming debt, like losing a job or a car accident. Debt is sometimes, but not always, the result of shopping sprees or gambling. Sometimes it’s a combination of mismanaging money and an unforeseen event. No matter what caused you debt, you deserve another chance at a stable, happy life.
Bankruptcy is opportunity to start over without chains. So why is there a negative stigma about bankruptcy?
Filing for bankruptcy has a negative stigma because it does damage your credit. Plus, it will stay on your record for 10 years. However, those who are in need of filing bankruptcy don’t need credit anyway because they are unable to afford any additional monthly payments. Once you make a repayment plan, like in Chapter 13, you can not open any lines of credit. Bankruptcy allows you to become a responsible spender, live within your means, grow a savings account, and stop foreclosure and repossessions.
Bankruptcy, itself is not bad. It does what it was designed to do: to save consumers who are imprisoned by debt. Debt with large monthly payments and high interest is bad. Not only is this kind of debt suffocating… it is scary. People in this situation may live in a nice house, but they can’t afford groceries. They might have a decent car, but couldn’t fix something if something breaks. Not unless they open another line of credit. That is how many hardworking Americans get into this nightmarish trap. They try hard, but need help!
Don’t let people’s opinions or stereotypes get in the way of finding financial freedom. Your family and friends may not have a proper understanding on how impossible your monthly finances have gotten. They don’t need to understand or approve of your decision. There are a ton of myths about bankruptcy and you don’t have to convince others that it is the right decision.