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The truth about filing for bankruptcy

For many people living in Broward County, Florida, filing for bankruptcy implies negligence or failure to manage one’s personal finances correctly. Those that have faced serious financial challenges in recent years understand, however, that there are instances where Chapter 13 and Chapter 7 bankruptcy are the most effective and responsible options available to individuals that have accumulated an unmanageable amount of personal debt. Here are a few key points about what personal bankruptcy can and can’t do for people around the country.

Bankruptcy can relieve stress

While there still seems to be a degree of stigma associated with bankruptcy, the process of filing for bankruptcy and taking control of one’s financial difficulties can not only be empowering but extremely satisfying as well. Having the support and feedback of an experienced bankruptcy lawyer can help individuals make smart financial decisions that have a positive impact on their future.

Bankruptcy can’t eliminate all forms of debt

No matter if it’s Chapter 7 or Chapter 11 bankruptcy, there is not a form of bankruptcy that can clear every type of personal debt. For example, fraudulently acquired loans are not addressed through bankruptcy and neither is student loan debt the majority of the time.

Bankruptcy can allow for improved credit

Some credit institutions may be more inclined than others to provide a loan to an individual, but that does not always imply that bankruptcy automatically excludes someone from being eligible for credit. And once an individual’s credit score begins to improve, it’s not unusual for them to be approved for more credit.

Bankruptcy shouldn’t compromise one’s job or home

Under no circumstances is it legal for employment decisions to be based on an individual’s bankruptcy status. Similarly, the value of a home is not typically considered as an option for repaying creditors during bankruptcy proceedings.

Source: Business Day, “Common misconceptions about bankruptcy,” May 14, 2014

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