There are a lot of stigmas and negativities surrounding bankruptcy, painted by the media’s relentless crucifixion of celebrities and individuals who are in the lime-light that file. Bankruptcy is far more common than most people in Pennsylvania think, with an estimated 1.25 million Americans estimated to file this year alone. This number sounds staggering, but it has decreased from last year.
Though most would assume that those who file for bankruptcy simply cannot resist swiping that credit card, the average person who files does so for multiple reasons, many of which are not as condemning at the stigma makes the act sound. Here are some of the common myths surrounding bankruptcy.
The first myth is that people who file bankruptcy are fiscally irresponsible. This is not true. Most people who file for bankruptcy have encountered life altering circumstances that have caused financial distress. This often includes divorce, loss of employment or a serious medical issue. Many well-intended and responsible Americans are driven to bankruptcy as a last resort under dire circumstances.
The second assumption is that bankruptcy alleviates all debts. Once again, this myth is not true. While bankruptcy will help to remove some debt, it often involves a strict process of repayment that meets the needs of the filer. Some debts can be resolved, such as student loans that belong to students who are facing severe hardships.
There is a negative stigma attached to filing for bankruptcy due to these common myths. In reality, bankruptcy is a necessary act that is a game-changer for many struggling families. If you have additional questions, speaking to an experienced attorneycould be beneficial.