Sacramento Bankruptcy: Bankruptcy Myths Exposed
Over the next few weeks and posts, I will expose some of the major bankruptcy myths out there. The first, and often the most common, is that bankruptcy is a financially irresponsible move. Or that it is financially irresponsible to incur more debt than you can afford to repay. This US News report reflects many of these myths.
The reality is that most debt discharged, or eliminated, through bankruptcy, is tied to medical treatment, bills and living expenses. Rarely are debts discharged through bankruptcy perceived as financially irresponsible. That’s because they’re not. It’s a myth.
The cost of living has increased. And it has increased at a much faster pace than in years past. Just ask a college graduate with student loans, the uninsured ill, or underemployed parents trying to provide. Debt has become a necessity of American life. And that is definitely no myth.
What, then, to do with the debt? The credit card industry has tried to portray and perpetuate the myth that filing bankruptcy on your debt is financially irresponsible. But why? They don’t want there debts discharged is why. Debt you can pay is one thing. Debt you can’t repay is another. Bankruptcy is about what to do with that debt you cannot afford to repay.
And if you cannot repay your debt now, you’ll be even less like to repay it later. Debt grows more commonly than it shrinks if you cannot afford to pay it. Often incurring new debt to repay old debt becomes a way of life. When you run out of Peters to pay Paul, though, something has to give.
Bankruptcy is about doing something with your debt when you have nothing else to do. When you cannot afford to repay your debt and you can no longer borrow to handle your debt load, bankruptcy becomes a necessity, not a myth. Bankruptcy is a tool. It is a financial tool. And it is a good one if you need it.
Just know bankruptcy is an option to help and bankruptcy myths are not reality.