Approaching or thinking about bankruptcy can create several doubts and fear in minds of an individual. Some of it might be valid and needs emphasis while some might be over-exaggerated and not worth putting in so much time or effort. While the fears if not validated create unnecessary stress and over-caution that could further complicate the situation. To ensure a much clearer and simpler approach to bankruptcy, we list down some of the common bankruptcy-related fears and their analysis. These can be listed as follows-
1. Fear of never being able to avail of a big-ticket loan ever
After bankruptcy, the filer might have a perception that it is highly impossible for them to avail of a big-ticket loan like a car loan or a home mortgage loan ever. This fear though is partially true. It is true that availing of large credit after bankruptcy might not be easy and there might be a need to rebuild your credit score and wait for about 3-4 years before trying to avail yourself of a big-ticket loan. Get the best tips for rebuilding your credit score quickly on https://www.recoverylawgroup.com/bankruptcy/.
Bankruptcy does have a negative impact on the credit score, and it is bound to be that way for years after bankruptcy. However, strategic ways and the right financial habits can help in improving credit scores significantly in a shorter period. The fear is over-exaggerated, but it is an important consideration before filing bankruptcy. For instance, if you are planning for a car loan or home loan in say couple of years, bankruptcy will certainly be a roadblock for the same.
2. Fear of losing all property
Bankruptcy does pose a significant risk to the assets or properties owned by the filer. Especially if the bankruptcy filer is using chapter 7 to file for bankruptcy, the risk is more on the assets. However, it is not true that all assets of the filer will be liquidated, and the filer will be left empty-handed. There are some essential assets that are safeguarded by bankruptcy codes to enable some basic living standards for the debtor after filing for bankruptcy. The use of exemptions can help in safeguarding a significant number of assets.
Another important proposition is to understand whether filing chapter 7 or chapter 13, no asset whose debt isn’t paid can be retained without accepting the debt associated with it. Bankruptcy does not allow for free assets. If an asset must be retained, the loan terms associated with the asset if any shall also prevail.
3. Fear of shame and humility in front of friends, family, or colleagues
How the society thinks and perceives about you is also an important consideration that instills fear. There is a significant amount of fear of losing self-esteem or respect in society after bankruptcy. However, if filing for bankruptcy is not a great thing, it isn’t something bad as well. Many people file for bankruptcy every day and it is a legal framework that allows for a reboot to your financial practices.
There is a self-esteem and respect issue for sure after declaring bankruptcy as the guilt of not being able to repay some creditors is painful. However, at the same time, it is not as big a factor when the assets like home are being foreclosed, when the financial situation is worsening day by day, or even if you are stressing out in trauma and are still not being able to figure a way out. The price of bankruptcy might be the fear coming true but sometimes there is no other way around it.
It is always better to run your fears across an expert and have a clear mind as to what is right for you at a particular moment. This can also be achieved by dialing 888-297-6203 to connect with top attorneys across Los Angeles & Dallas, TX in minutes.