Topics in the finance world tend to go through cycles. In fact, a lot of people often report that it’s hard to figure out what they should actually do because it’s always tempting to just plunge into whatever sounds good at the time. The truth is that you should always be weighing everything carefully against what your real and current situation is, not just the example situations that you hear about in financeland.
One thing that a lot of people get right is bankruptcy. On the other hand, one thing that a lot of people get (italicize “wrong”) wrong is bankruptcy. Isn’t that contradictory? Not really.
You see, bankruptcy can be a really great thing for people that truly have no other option. In fact, the bankruptcy laws are structured so that you really have no other choices when you’re filing bankruptcy. However, a lot of people mistakenly think that it’s supposed to be something that you do when you still have other options. The truth is that the laws are getting stricter and stricter. You’re not allowed to keep as many assets as you used to in the past, because people have abused the bankruptcy system so badly. It’s not something that you turn to after you run up all of your credit cards on purpose. In fact, this is something that’s considered fraudulent, and the courts have punished people strongly for doing this.
If you’re looking at bankruptcy from every angle, then the shocking truth about bankruptcy that you must hear is that it’s not as clear cut as you might think. If you’re sitting here thinking that you will just file bankruptcy and watch all of your debts disappear, you’re highly mistaken.
For example, you might not realize this but the truth of the matter is that there are some types of debts that aren’t disposed of during the bankruptcy process. If you have student loans, chances are good that they are going to stay with you until they are paid off. It’s very difficult to have them discharged during bankruptcy — most people fail the “hardship” test to have them removed. Private student loans are even harder, which is why so many people warn against them when you’re trying to get stuff done in the educational world. Of course, when the promise of a better life calls, you might feel like it’s something that you have to do. Yet this is why a lot of people say that the high cost of education is higher than most people expect, too.
This is not the only thing that you have to consider. You have to remember that your credit will be essentially demolished for seven to ten years, depending on the type of bankruptcy you process. This means that it will be difficult if not impossible to get into some industries where credit scores and histories are pulled, and it will be difficult to get a home loan. Even if you are approved, your interest rate is going to be a lot higher than someone that has a better credit history.
All is not lost when it comes to bankruptcy. It really is a chance to get a fresh start, and this is something a lot of people need more than anything else in the world. You might feel like it’s impossible to get a fresh start, but that’s really not the case.
If you take the time to get a bankruptcy attorney that can walk you through the process, there’s really no reason why you can’t get things done in virtually no time at all — get started today!