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5 Reasons Why Bankruptcy Isn’t the End

5 Reasons Why Bankruptcy Isn’t the End

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Declaring bankruptcy isn’t the end of your life. However, filing can help you immensely with certain aspects of your financial life. While there is no one-size-fits-all solution, and your problems won’t magically disappear, you can move on. The responsibility of filing means you understand and acknowledge you need financial help. Further, there are support options via accountants, attorneys, and economic groups for assessing your financial life.

It is a Responsible Move

Bankruptcy may occur for various reasons, and reckless spending is rare among them. Filing for bankruptcy demonstrates maturity and responsibility, and your decision to file is probably the right one. Despite the difficulty in acknowledging it, filing is not something to be ashamed of. Bankruptcy is designed to assist rather than shame. And it’s confidential. However, a family law separation agreement often includes financial disclosure. This may not allow you to proceed to the extent desired by both parties, and further consultation is required.

Restart Your Life

The purpose of bankruptcy is not to acknowledge financial failure. Defaults tend to be caused by external factors beyond individuals’ control. The top reasons you might file for bankruptcy include the following:

  • Divorce proceedings
  • Job loss 
  • Medical expenses

While it isn’t pleasant, the filing process allows you to relaunch your financial life. In addition, it demonstrates that you have recognized your financial issues and taken the necessary steps to rectify the situation.

Acknowledge Financial Responsibility

Your financial issues won’t disappear simply because you filed. The bankruptcy process aims to eliminate the most critical debts. This is accomplished by stating that you can’t pay your debts legally or reasonably. Some individuals believe that their debts will be discharged entirely. Unfortunately, this is not true. Also, a bankruptcy filing does not usually affect legally mandated payments, such as back taxes, child support, and alimony. Therefore, regardless of the outcome of your filing, you will still need to pay any owed amounts.

You Won’t Lose Everything

People have been discouraged from filing because of the dangerous myth they will lose their homes. Sadly, failure to act usually results in people actually losing their homes when they could have prevented it. Many factors determine whether or not you will lose your home, and the decisions are made on an individual case basis. The only exception is if your property has negative equity; in that case, you can remain in your home. Negative equity is declared when the value of your property is below the outstanding mortgage amount. It is also possible to keep some personal belongings as possession loss only happens in around 5% of cases.

There is Always Help Available

A common misconception is that an accountant is necessary when filing for bankruptcy. Of course, accounting professionals are qualified to help you through the process, but they are not the only ones who can. Many charities, agencies, and private companies are also available to help you with bankruptcy. From general procedures to expert legal advice and handling all the necessary paperwork for you. Of course, you can also do it yourself, but it’s not recommended since there are many complexities involved. And one mistake could cost you dearly.

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