There is a common misconception that bankruptcy is always brought on by carelessness with money. However, this is far from the truth. Many American citizens and businesses are currently struggling financially, for reasons outside of their control.
Although the decision to file for bankruptcy is not one that should be taken lightly, the outcomes are not always negative. Bankruptcy can offer people the chance to take a breath and start again.
Preventing things from getting out of hand
Being in debt leaves many in a vicious circle that they cannot get out of. Debt collectors can be relentless in their pursuits, and outstanding debts may eventually be turned into wage garnishments. These situations can be overwhelming and bankruptcy provides an opportunity to retain control. Depending on the route you take, certain debts can be written off and anything outstanding can be tackled with an affordable payment plan. This will get debt collectors off your back and negate the threat of wage garnishments, giving you the breathing space that you need to get back on track.
Rebuilding your credit
While bankruptcy will impact your credit rating, it is surprising how quickly this can be restored. Pre-bankruptcy, you may be caught in a cycle of debt, with no sign of daylight. This will result in your credit remaining low indefinitely. After bankruptcy, you can start to meet your financial obligations again and stick to your repayment plans. All of this will help to improve your credit rating in a relatively short period of time.
There is no shame in being in debt or reaching out for assistance. As you navigate the bankruptcy process, make sure you understand all of your legal options fully.