Owning a home is a dream shared by many and in this financial climate it may look bleak, especially if you are strapped in debt. When the rent is due and you cannot meet your basic living needs, it feels like owning a home is impossible.
You have thought about bankruptcy, but someone told you that if you file, you will never be able to get a mortgage. Fortunately, that is not true, however, it is one of the reasons some people don’t file and experience the relief that bankruptcy can bring.
Embarking on a path to debt relief and regaining financial control is possible, but so may people don’t deem it an option and here’s why:
So, what are the main reasons people resist filing for bankruptcy?
Fear of not qualifying for a mortgage later in life is a big reason people resist filing for bankruptcy. They are also concerned about how it will affect their credit score and current assets. Many people resist filing due to misinformation and the stigma surrounding bankruptcy.
Many people are afraid of how it will “look” if they file bankruptcy. The truth is, no one needs to know if you don’t tell them. The public records are there, but you have to go digging for them if you want to see them. Gone are the days of that information being published in newspapers.
So, What are Common Misconceptions About Filing for Bankruptcy?
A common misconception about bankruptcy is how it affects your ability to get loans, either for a car or for a home, in the future. Many people think that if you file, you will not qualify, but this isn’t true. Some people qualify for loans within a few years of their settlement. It just depends on your situation, including paying your bills on time and not taking on too much new credit card debt.
Another misconception is about how it affects your credit rating. Most people who qualify for bankruptcy already have a fair or poor rating, and the bankruptcy will not change that much. Although bankruptcy stays on your credit history for up to ten years, with the debts gone, a new credit card for building positive credit, and paying bills on time, your credit may actually be better than ever in just a few years.
So, When is it a Wise Choice?
If you have mountains of medical bills and maxed-out credit card bills, bankruptcy could provide relief from collectors. It could help you wipe the slate clean and give you freedom from the stress of how to pay those debts every month.
Situations happen that are out of your control and can create financial hardship. Job loss, divorce, death, or serious medical conditions are all events that can’t be predicted most of the time and have huge effects on finances. If these things have happened to you and you can’t seem to recover financially, it might be wise to choose bankruptcy and start anew.
Related Questions
So, What is the Most Common Type of Bankruptcy?
Also known as liquidation, Chapter 7 is the most common type of personal bankruptcy, closely followed by Chapter 13, which is a repayment plan type. Which type is best for you is decided by you and your attorney before filing.
So, What is the First Step for Filing Bankruptcy?
The first step you should take if you are considering bankruptcy is to contact an attorney who specializes in this. They can let you know if you might qualify and how the process works.
In Sum
People resist filing for bankruptcy out of fear and because they have been given bad information. Although it does affect your credit, it can also provide relief and a new beginning in the right situation. A new home could be yours, with patience, self-discipline, and courage.
Bankruptcy Solutions in Massachusetts
Hines Law is a bankruptcy law firm with several locations throughout the greater Boston area that provides representation, guidance, and support for those seeking relief from debt. We specialize in Chapter 7 and Chapter 13 making sure our clients choose the best option for their situation.
Our bankruptcy attorneys have vast experience in navigating bankruptcy laws so that you are protected and able to rebuild your finances and life. Don’t know where to begin? Call one of our bankruptcy firm locations throughout the Boston area and schedule a Free consultation.