Fighting the emotional stigma of a personal bankruptcy
People may feel ashamed or guilty about filing for bankruptcy. In fact, this option may help them recover from their financial troubles.
Utah residents who are experiencing financial difficulties may feel as if the light at the end of the tunnel exists in the form of a personal bankruptcy. However, they may be hesitant to pursue this option. Despite Chapter 7 or Chapter 13 bankruptcy being a valid option for debt relief for families across the country, many believe there is a stigma surrounding the practice.
It can help to dispel the notion that personal bankruptcy should only be used as a last resort and is almost always a bad idea.
What are the common bankruptcy stigmas?
One of the most common misconceptions surrounding bankruptcy is that the bankruptcy will haunt a person for the rest of his or her life. Consequently, people may feel afraid to take this step or risk never being able to take out a major loan again. They may also feel ashamed or guilty to take what their associates call the “easy way out,” instead of repaying their debts.
What are my options after bankruptcy?
Many people, after recovering from bankruptcy, are surprised to discover it can be easier to get new lines of credit soon after their discharge than they expected. Starting over with a clean slate, their credit has nowhere to go but up, as long as they continue to make wise financial decisions. They can begin improving their credit scores, in contrast with those who refuse bankruptcy and continue to struggle with their debt and late payments bringing their credit down.
How common is bankruptcy?
Bankruptcy is more common than many people think, with 731 personal bankruptcies in Utah in 2017 alone, as reported by the U.S. Bankruptcy Court for the District of Utah. As a result, many financial institutions and lenders are more willing to give a chance to a person soon after a bankruptcy discharge.
Many things can hold people back from considering bankruptcy, especially if friends, family and business associates are warning them against it. It can help to consider one’s unique circumstances, as well as the benefits of filing for bankruptcy. Many stigmas surrounding bankruptcy had more merit in decades past, but these emotional issues can often be overcome today with careful planning and a healthy attitude. Utah residents who are drowning in debt might find it helpful to speak with an experienced bankruptcy attorney, who can explain their options and help them choose the best path for their situation.