Are you contemplating filing for bankruptcy in Wisconsin? If so, you may think that this action will do irreparable harm to your credit score. Your spirits may be dampened by certain assumptions about bankruptcy that have been conveyed to you by your friends or family. Don’t panic because you are not alone!
According to the United States Courts website, there were 911,086 bankruptcy filings in March 2015. That’s just one month! Every year, millions of people in the United States file for bankruptcy. A large portion of these individuals files on the advice of their attorney. Your long-term financial health can significantly improve after filing for Chapter 7 or Chapter 13 bankruptcy. Let’s explore some common myths about taking this type of action.
1. I’ll lose all of my possessions!
You may be worried that you will give up your car, or worse, your home. However, in a significant number of Chapter 7 bankruptcy cases, the individual keeps most of one’s possessions. This is because certain assets, called “exemptions,” may be kept in order to sustain normal daily life including transportation to and from your place of work. The situation may be even better in a Chapter 13 filing because, generally speaking, you get to keep all of your assets. The value of those assets will be accounted for in the repayment plan that is created.
2. All people who go through bankruptcy are irresponsible
Should all people who go through bankruptcy be ashamed of themselves? Of course not! In certain circumstances, this action is the most responsible thing a person can do. It’s much better than hiding from problems that grow and become almost insurmountable. Furthermore, many individuals are in this situation due to unforeseen and serious medical problems. Even those with good health insurance could run into a situation where their medical care, or that of a loved one, is not covered by their plan. Others may have lost their job or been subject to expensive litigation due to a divorce. If you add the burden of student loans to any of these situations, you may have no choice but to file for bankruptcy.
3. My credit is ruined forever
You might be surprised how quickly your credit score starts to rebound after declaring bankruptcy. Secured credit card offers may start arriving in your mailbox within months. These credit cards can be an excellent method of rebuilding your credit by paying small monthly payments, on time, for a year. Sometimes you can qualify for a mortgage in three short years after filing!
If you are thinking of filing for bankruptcy in Wisconsin, you are probably going through a very challenging period in your life. However, don’t let the supposed stigma of taking this action deter you from doing what is best for your financial future. Consult an experienced attorney who can help you create a strategy for a successful resolution of your specific situation.