Collection agencies and creditors will often call debtors and allege that unsecured debts that have been reduced to judgments and credit card bills are no longer dischargeable in bankruptcy. These and other similar allegations made by debt collectors simply aren’t true. If you have debts that you need to discharge in bankruptcy, you should consult an attorney to learn more about your rights.
Some people are hesitant to file for bankruptcy because they feel that doing so will forever ruin their credit. That is another myth credit companies would like you to believe. The fact is, filing for bankruptcy may be the only viable way for certain individuals, especially those who have stopped paying their creditors, to eventually rebuild their credit and get a fresh start. A bankruptcy can legally remain on your credit report for up to 10 years, but its effect on your credit score can start to diminish the day your case is closed if you adopt responsible credit habits such as paying your bills on time, using only a small portion of your available credit and not applying for too much credit at once. There are several lenders that offer both secured and unsecured credit cards to individuals who have filed for bankruptcy. You should start researching ways to rebuild your credit soon after receiving your bankruptcy debt discharge.
Another myth is that filing bankruptcy is financially irresponsible. That could not be further from the truth. Filing bankruptcy allows debtors to afford basic costs of living without throwing money away towards high interest credit cards. Although unemployment is at an all-time low, the ever increasing costs of living across the country force many to rely on credit cards just to get by. Even older Americans who thought they had put enough money away for retirement are filing bankruptcy in record numbers.
The primary reason people file for bankruptcy is because of circumstances beyond their control, such as job loss, reduction in pay, divorce, or significant medical expenses that are not fully covered by insurance. Although filing for bankruptcy will a temporary negative impact on your credit, it no longer carries the social stigma it held in the past, especially in these difficult economic times. Bankruptcy laws are there to provide you a fresh financial start when you need it.