It's critical that you fully understand foreclosure before moving forward. As such, you should be aware of the following myths, which prevail even though those who have been through the process know they don't hold up.
First and foremost, people think it's always better to try to pay the debt of yourself. This can be true in some situations, but the issue is that so much debt may be due at once that you can't make all of those payments. This means that interest kicks in and your debt climbs.
With Chapter 13 bankruptcy, debt is put into a repayment plan. You do pay it off, but this spreads the money out so it's affordable.
Another fear people have is that they'll lose everything. They're sure every asset will be sold. Even with Chapter 7, you don't have to worry about losing everything. With Chapter 13, using a repayment plan instead of liquidating assets, you can put this fear entirely to rest.
Finally, there's a myth that you've failed if you file for bankruptcy. People avoid it on these grounds even when it's clearly the best option.
You haven't failed. Bankruptcy happens for all manner of reasons. In many cases, for example, it's due to medical debt. You can't predict a disease or accident that puts you $500,000 in debt in less than a year. There's no failure in looking for the best financial option.
Are you thinking that bankruptcy may be the best path moving forward? Understanding exactly how it works and what myths to ignore can help you take those first steps.
Source: Time, "5 Bankruptcy Myths You Shouldn’t Believe," Sean Pyles, accessed June 08, 2017