You can’t pay your debts, and you know bankruptcy can help you get out of a difficult situation. Yet sometimes quick fixes come with long-term consequences that make your regret your initial decision.
Does this apply to bankruptcy? Will you be walking around with your financial record hung around your neck forever after? Will people treat you as an outcast and close their doors in your face when they see you coming? No.
Firstly, bankruptcy does not mean you did anything wrong
While you could get into insurmountable debt by partying like it’s 1999 every weekend, that is not how most people end up broke. Typically, they did not have much fun at all.
Medical bills are one of the most frequent reasons people need to file. Divorce is another. Studying, too, can push people into a financial hole, and while you are unlikely to clear student loans by filing, clearing your other debts may leave you enough to pay back your studies.
Secondly, bankruptcy could be a step on the road to success
Think about all the famous people who have filed for bankruptcy. Kim Basinger, George Foreman, Mike Tyson are just three who filed for bankruptcy and went on to do very well for themselves. One person even became President after doing so.
While bankruptcy might not seem like a conventional route to success, it could be if it frees you from your current situation.
Bankruptcy will not stay on your record forever. If you opt for Chapter 7, it comes off in seven years. If you opt for Chapter 13, it will be 10. You can start building your credit score, wealth and reputation back up before that. Who would you rather be? Someone who declared bankruptcy and went on to financial success? Or someone who stayed stuck forever?
