"Bankruptcy" often feels like a huge intimidating word looming over our heads when we're facing severe debt, but in reality, there are a lot of false ideas about bankruptcy that make it seem scarier than it is.
Below are some myths about bankruptcy that may worry you and why they don't need to scare you away from considering your options.
"I'm an embarrassment and a failure if I have to file for bankruptcy."
Not at all. People file for bankruptcy every day, and you are never alone or "the only one" going through it. Filing for bankruptcy is a fresh start, one which allows you to start rebuilding and get your life going again. It lifts the constant pressure of trying to repay debt. It also shows that you are moving forward, which is not a failure at all.
It isn't publicly-shared information, so you do not need to fear embarrassment either. Technically speaking, anyone can go to a courthouse and look at your public records, but realistically speaking, there is a very low likelihood that your family and friends are going to do that. The only person who will probably see that you filed for bankruptcy is your employer, but they do not bring it up at work or share that information publicly with any of your co-workers.
"I will lose everything if I file for bankruptcy."
You may have heard that your belongings, even your house, will be liquidated to pay off your debt if you file for bankruptcy. The truth is that many of your belongings are actually protected if you file for bankruptcy. Bankruptcy can halt foreclosures on your house and you can often keep your car as well, depending on the exemption amount. Many people believe that bankruptcy takes everything they own, but you keep many of your personal belongings, so you don't need to worry that you are giving up all you have when you file.
"I'll never have a house or be able to borrow money again if I file."
One of the biggest concerns for people facing bankruptcy is how it will affect credit score. And yes, your credit score may be low after bankruptcy. But debt and missed payments are hurting your credit score too, and filing sooner rather than later means you can start improving your credit immediately. People who file for bankruptcy are able to borrow money and purchase property much sooner than you might think. Many people recover from bankruptcy in just a few years. It is not true that your credit is permanently damaged, so you do not need to worry that bankruptcy will affect your ability to get loans for the rest of your life.