It is no secret that the cost of living is impacting most households in the U.S. In fact, over half of the population have some form of credit card debt.
When debts become overwhelming and impossible to pay, filing for bankruptcy is an option. However, many people are put off of doing so because of the stigma behind filing for bankruptcy.
What stigma do filers potentially face and what is the truth behind these issues?
Social stigma
Sadly, many individuals feel ashamed by getting into financial trouble. They may feel like other people will judge them for not being able to pay their bills. Nonetheless, the truth is that most individuals end up struggling financially through no fault of their own. For example, one of the leading causes of financial struggles is medical bills. Medical procedures can run into tens and even hundreds of thousands of dollars, particularly for those with serious or chronic health conditions. Having medical issues that need to be resolved is nothing to be ashamed of.
In most cases, the feelings of anxiety from bankruptcy filers are unfounded. Most people aren’t that quick to judge and as mentioned, millions of Americans find themselves in a similar position in terms of struggling with the cost of living.
Financial stigma associated with bankruptcy
Many filers feel like they will be treated as “damaged goods” if they file for bankruptcy. They feel like no bank will ever give them a loan and they’ll never get a mortgage or any other form of credit. While it is true that bankruptcy has a negative impact on credit ratings, this doesn’t need to last forever. In just a few months, filers can begin to rebuild their credit. In a year or two, their credit score could even be higher than it was pre-bankruptcy
One way to shift the stigma of bankruptcy is to obtain accurate information. Seeking legal guidance is the best place to start.
