The average person does not want to admit that they have serious financial problems,
so people shy away from filing personal
bankruptcy in America, even if they have huge debts, because they fear
that filing for personal bankruptcy protection will worsen their financial
situation. There are a lot of myths about personal bankruptcy that prevent
people from getting a fresh financial start. Here are the top five personal
bankruptcy myths.
Myth #1: Bankruptcy is always better than debt
consolidation.
Truth #1: In some cases bankruptcy is a better solution than debt consolidation.
In other cases a debt consolidation is a better way to get you back on track.
If your debts are relatively small, and you still have a good credit rating,
a debt consolidation loan can help you reduce the interest you pay. If your
credit is bad, personal bankruptcy may be the best solution. It depends on
your circumstances
Myth #2: Bankruptcy is only for unemployed people.
Truth #2: Most people who file for bankruptcy
in America have a job. If they have serious financial problems, the people
they owe money to can take them to court and try to seize, or garnishee,
a portion of their wages. That is why that most people who seek bankruptcy
protection are working.
Myth #3: Bankruptcy gets rid of all of your debts.
Truth #3: Personal bankruptcy will eliminate, or discharge, most of your debts.
Generally credit card debts and unsecured bank loans are discharged in a bankruptcy.
However, if you have debts for child support, or from certain government obligations,
those debts may not go away in a bankruptcy.
Myth #4: Bankruptcy is the fastest solution to debt problems.
Truth #4: The answer depends on your situation. If you have $100,000 in debt
and can only afford to pay back $100 per month, personal bankruptcy is faster
than trying to pay back your debts yourself. However, if you have a good income
and a small amount of debts, paying them back yourself is the fastest way to
repair your credit.
Myth #5: If you go bankrupt you are a bad person
Truth #5: If you rob a bank, you have done something bad. If you got divorced,
or got sick and cannot work, and as a result have a lot of debts, you are not
necessarily a bad person. Sometimes bad things happen to good people. For many,
personal bankruptcy is the best way to get a fresh start.
Author Information: Bankruptcy America (www.bankruptcy-america.com)
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