There are many bankruptcy myths that circulate, often deterring people from experiencing the benefits the process has to offer. Misinformation is one of the worst offenders to the bankruptcy process and most people find themselves surprisingly pleased once they learn the truth behind some common misconceptions.
Most people hold the stigma that anyone who files for bankruptcy is financially irresponsible. While there are a fair number of people who fit this category, it is far from the standard. In fact, economic pressures and unexpected life events are the driving force behind the reason to file for bankruptcy. Job loss, divorce, death in the family or debilitating medical illness can all strike when least expected and quickly lead to financial hardship.
Although the bankruptcy process might appear confusing on the surface, it is actually quite transparent once you understand how the process works. Filing for bankruptcy is as easy as completing the paperwork, paying the court fees and completing a credit counseling course. From there, the court handles the details and grants the debtor a discharge of their debt. An experienced bankruptcy attorney can guide anyone through the process to a smooth resolution.
One of the biggest myths associated with bankruptcy is that the process damages credit. The truth is that missed debt payments and delinquent account standings damage credit, which happen long before bankruptcy is even considered. While having a bankruptcy on your credit history can make future credit more challenging, the process does offer an immediate opportunity to boost credit when it erases prior negative histories.