Since bankruptcy is born out of not being able to keep up with bills, loans or other payments, there is a negative connotation with it. But life is unpredictable and the option to make changes or have a fresh start shouldn’t have any shame attached to it.
Filing for bankruptcy might be something you never saw yourself doing. However, taking action to relieve debt offers a chance to financially reset. And the reality is, most of the stigma around bankruptcy is based on rumor rather than fact.
Fallacies of filing
You don’t have to tell everyone you know that you filed a petition. And, although there are negative impacts to filing a petition, it will help you build stronger financial records in coming years.
Here are some myths about filing a bankruptcy petition:
- Everyone will know: Unless you share the whole legal process on your social media pages, your social circle doesn’t have to know that you filed for bankruptcy. Listing creditors on bankruptcy paperwork and notifying those you owe money to are, naturally, part of the process. And although it will require some digging and some fees, due to the public nature of court proceedings, the general public can find out. Employers can also find out if they request a credit score. Otherwise, if you aren’t a big-time celebrity, chances are your bankruptcy declaration won’t be the talk of the town.
- You’ve failed financially: Last year, a combined total of 772,646 people and businesses filed for bankruptcy in the U.S. Accepting your business has failed, getting behind on bills or being thrown unexpected medical expenses are all common hardships. But, if you’re filing for bankruptcy as a business owner, that doesn’t erase your gutsy decision to take an entrepreneurial career path. And if you’re personally filing for bankruptcy, you’re taking a big step to own up to financial mistakes or recover from unexpected debt.
- Your credit score won’t recover: It’s no secret that filing for bankruptcy will negatively impact your credit score, but many adults have gone through periods of not-so-great credit. It takes both time and good habits to rebuild, but that doesn’t mean it’s impossible to recover. Paying future credit card bills before they are due or not opening several lines of credit are a couple of ways to build up your score again.
Don’t let your pride or fear of gossip deter you from getting legal help to clean up your debts.