Bankruptcy Myths
If you want to come out of debt, debt consolidation, debt settlement and bankruptcy are the different ways to reduce the debt burden. Only you have to decide, on the best debt solution. Bankruptcy is the last option that you should opt for. There are several myths about Bankruptcy. Sometimes it seems to be the best way to come out of debt. In reality, however it creates a lot of damages. Apparently, bankruptcy might be a useful solution to debt problems but it is the most ineffective solution to debt. People develop misconceptions, and consider it to be the best solution at the moment of crisis. The different myths about bankruptcy are:
- New start:
If you declare yourself as a bankrupt, then it affects your credit report to a great extent. Your bankruptcy status is reflected in your credit report for next 10 to 20 years respectively. The creditors and dealers do not to grant loan applications of people whose credit report reflects that he is a bankrupt. But even if they grant a loan, they might charge you high interest rate. So, if you think that by declaring yourself as a bankrupt you can start fresh, you are wrong. The effect remains there for quiet sometime.
- Avoid creditor calls:
Bankruptcy can never help you to come out of debt burden completely. So there would be existing debtors even after you declare yourself as a bankrupt. Thus like debt consolidation and debt settlement, bankruptcy never allows you to avoid creditor calls.
- All debts are cleared for free:
Sometimes you opt for bankruptcy to reduce debt burden. You might feel that only by declaring yourself as a bankrupt, you can come out of debt burden safely. But you may not know that the process never promise you to make debt free. Bankruptcy may or may not help you to come out of debt successfully. Actually, it is a temporary relief from debt burden.
- Include only chosen accounts:
Bankruptcy laws are very strict at monitoring your accounts. If you want to hide some of your accounts from filing bankruptcy, you can get into trouble. This you can do only when you are confident that you can clear them off before filing bankruptcy.
- Simplicity in filing:
The entire procedure is not as easy as it seems to be. It is time consuming. But the Statutory laws being so stringent, it is not so easy to file a bankruptcy.