Filing for bankruptcy might not be the first thing that comes to mind when considering your options, but it could be the best decision. Contrary to popular belief, bankruptcy can offer many benefits to help you get back on your feet. Our Irvine bankruptcy lawyers explain why bankruptcy might be the best option and debunk some of the most common misconceptions about bankruptcy.
The Benefits of Filing for Bankruptcy
Bankruptcy, if done correctly, can be an excellent way to get out from under all your debts and get the financial reset you need. This may sound daunting, but there are many benefits that come with filing for bankruptcy. Let’s explore a few of the advantages of bankruptcy.
Once you file for bankruptcy, an automatic stay takes effect. Creditors must stop all collection attempts, including phone calls, letters, and wage garnishments. The automatic stay offers much-needed relief from creditor harassment.
Wipe Out Your Debts
Bankruptcy can discharge (wipe out) most, if not all, of your debt. This includes credit card debt, medical bills, personal loans, and business debt. Often, you are able to keep your home and car by reaffirming the debt.
You can get a fresh start financially.
Bankruptcy can give you a fresh start. It can discharge your debt and allow you to rebuild your credit. You will be able to get new lines of credit and qualify for better interest rates in the future.
Common Misconceptions about Bankruptcy
Now that we've gone over some of the benefits of bankruptcy, let's debunk some common misconceptions.
"Bankruptcy Will Ruin My Credit"
One of the most common misconceptions about bankruptcy is that it will ruin your credit score. While it is true that bankruptcy stays on your credit report for seven to ten years, it is not a death sentence for your credit score. Many people who file for bankruptcy see their credit scores improve within a few years. This is because filing for bankruptcy can help you get rid of debt that weighs you down and prevents you from improving your credit score.
"I Will Never be Able to Get a Loan"
Another concern you may have is not being able to get a loan again. While it is true that it will be more challenging to get a loan after going bankrupt, it is not impossible. In fact, you may be able to get a loan sooner than you think. Many lenders specialize in loans for people with bad credit.
"Filing for Bankruptcy Means You are Irresponsible."
Another misconception about bankruptcy is that it means you are financially irresponsible. This could not be further from the truth! People who file for bankruptcy often face unforeseen circumstances, such as medical bills or job loss, that have left them financially unstable and unable to pay their debts.
If you're struggling with debt, bankruptcy might be the best option. Don't let common misconceptions about bankruptcy keep you financially stagnant. An experienced bankruptcy lawyer can help you understand your options and make the best decision for your financial future.
Your Next Step
Still not sure if bankruptcy is right for you? Our lawyers at McFarlin LLP can help you understand your through the bankruptcy process from start to finish. We have helped many people take the first step towards financial freedom by filing for bankruptcy.
Call us today at (949) 570-5025 to schedule your free consultation. We look forward to helping you get back on track!