Your imagination is never more creative than when thinking about filing bankruptcy.
You recount bankruptcy myths.
You foresee all kinds of horrors.
You recite excuses not to get rid of debts you can’t pay off.
Let’s look at some of those excuses and see why they are nothing more than unfounded fears and feeble misconceptions.
Excuse 1: I’ll never ever get credit again
In fact, you’ll be offered new credit (on horrible terms) just as soon as you get a bankruptcy discharge, if not before.
People in bankruptcy can get car loans.
The situation improves year by year because credit heals.
Excuse 2: I incurred these debts and I should pay them
Repayment is certainly the better approach if it’s truly an option.
Ask yourself, 1) is it possible to repay on the present terms; and 2) at what risk to your future and that of your family?
Most people who struggle to repay debt go without health care or health insurance; emergency savings; or anything set aside for retirement.
They gamble their future health and security to repay debt that is frequently far in excess of what they can realistically pay.
Excuse 3: I’m ashamed
Most people who file bankruptcy have suffered job loss; divorce; or ill health.
A much smaller group got there via poor choices or over optimism about their ability to bounce back from adversity, or a combination.
The bankruptcy system doesn’t condition relief on an assessment of whether you “merit” a discharge. No one sits in judgment about how you got in debt.
After bankruptcy “reform”, it may channel you into a partial debt repayment plan based on the means test if you have a substantial income, but the door to debt relief is still open.
The system treats honest debtors with respect. Generally the only people at bankruptcy hearings are others who are in the same boat (and their lawyers).
While it may be emotionally difficult to admit you are financially stuck, bankruptcy is both psychologically and factually liberating.
Remaining in hopeless debt saps energy and efficiency.
We explode the myths about bankruptcy.
