Being in a tough financial situation can make it difficult to see things clearly. You may be feeling stressed due to constant contact from creditors, and this could lead you to make poor financial decisions because you are not in the right frame of mind to sit down, analyze your situation and set a financial plan.
You may also be reluctant to take drastic action such as file for bankruptcy because you have heard negative things or do not want to feel that you are accepting defeat. While this is completely understandable, you should also understand the common misconceptions associated with bankruptcy.
There are many different types of bankruptcy aimed at those in differing situations. If you are struggling due to a sudden loss of income or a poor cash flow, then Chapter 7 bankruptcy may be right for you. The following are some things to consider before dismissing the prospect of bankruptcy.
You’ll probably be relieved of stress
If you are feeling overwhelmed by the number of creditors trying to get in touch with you, filing for bankruptcy will feel like a weight off your shoulders. Automatic stay protection means that once you file for bankruptcy, creditors will need to stop all debt collection attempts.
You won’t have to liquidate all of your assets
Chapter 7 bankruptcy involves liquidating assets to pay off debts. However, many people do not realize that exemptions protect most typical assets like furniture, cars, clothes and household items.
There is no shame in filing for bankruptcy
Hugely successful companies file for bankruptcy in order to set themselves up for future success. They don’t have shame, so why should you? Think of it as one step toward a more positive future.
If you are struggling financially because of a loss of income, it is important to realize that the longer you delay action, the more debt you will acquire. Start by speaking to an expert about whether bankruptcy would be the right option for you.