Bankruptcy is a most fearest word for most of us. Many bankruptcy filers never really recover from their financial distress because the way they manage their money. There’s also many truth and myth that we’ve heard about bankruptcy and in this entry I’ll share some common truth and myth about bankruptcy :-
1 ) Myth: I’ll just file bankruptcy and start over; it seems so easy.
Truth: Bankruptcy is a gut-wrenching, life-changing event that causes lifelong damage.
2) Myth: You will never get a loan again after bankruptcy.
Truth:There is slightly more disposable income available and post-bankruptcy debtors are in a much better position to responsibly borrow and finance. Post-Bankruptcy debtors can use this available credit to rebuild MUCH FASTER than you may think.
3) Myth: Medical bills can’t be discharged
Truth : A variation on this myth is that “you can’t discharge credit card debt in bankruptcy.” This has the sound of the law-as-described-by-bill-collectors.
Almost all unsecured contract debt, like credit cards, personal loans, and medical bills, remain dischargeable in bankruptcy.
4) Myth: Bankruptcy is the only solution to debt problems.
Truth : There are many other options available to you, depending on your income and resources. Bankruptcy may not be your only option, but a trustee is the only professional who can protect you from your creditors. Call us for a free assessment
5) Myth: Going bankrupt is like admitting failure. It’s shirking responsibility.
Truth: Bankruptcy does not reflect on who you are as a person. It doesn’t mean you’ve done something wrong. It can result from things beyond your control such as changes in employment or your personal life.
6) Myth : Bankruptcy erases all your debts.
Truth : Definitely not true. Some debts cannot be discharged in a bankruptcy filing. They include secured debts like mortgages or car loans, alimony, spousal and child support obligations, court fines, claims arising from an assault, or student debts, unless you’re been out of school for at least seven years (this can be reduced to five years in cases of hardship).
Why people get bankrupt? There are reason like this:-
- Medical Expenses is too high. There’s many cases people become bankrupt because of medical expenses. The bill for disease is too high. Rare or serious diseases or injuries can easily result in hundreds of thousands of dollars in medical bills – bills that can quickly wipe out savings and retirement accounts, college education funds and home equity
Most of people can’t pay especially if they don’t have any insurance policy.
- Job loss. It happen especially when there’s no stable salary. It will make a person declare bankruptcy.
- Poor/Excess Use of Credit. It happen because there’s no management in their financial.
- Divorce/Separation. Divorce also can make a person bankrupt. After divorce, there’s legal fees, assets need to divide.
- Unexpected Expenses. Unexpected expenses such as loss in business, being cheated by someone, thief, being sue , etc also can make a person bankrupt.
- Gambling.. Yes, it can make you bankrupt in a day or a second.Gamblers Rehab Centre Malaysia in their research said that gamblers could be addict only involved in this game for 2 years.
Many bankruptcy cases can be avoided with proper help. One way is to get the bankruptcy lawyer.
That’s all. If you have any reason, let’s share with us. Maybe it will help us to prevent from being bankrupt.
Reference :- Bankruptcy in Brief