Confronting common bankruptcy fears

| Oct 14, 2020 | Bankruptcy |

The prospect of filing for bankruptcy can be frightening. While it is certainly not a step that should be taken without serious consideration and legal advice, filing is often preferable to facing crushing debt. Those who find themselves considering bankruptcy in Wisconsin need to know how to recognize and handle common bankruptcy fears.

Not being able to buy a car or home

While filing for bankruptcy protection does carry some credit ramifications, many people incorrectly believe that filing for bankruptcy will render them unable to purchase a car or home again in the future. The fact is someone who files for bankruptcy and receives a discharge of debts will be able to immediately apply for credit. Receiving credit cards can help when rebuilding the credit score needed to buy a home or car.

Losing a home

Analysts report that only 2% of bankruptcy cases result in the filer having to turn over a property to their debtors. Each state has its own list of exemptions in bankruptcy cases, and all of them allow for a person to keep a residence. There may be times when an individual owns more than an allowable amount of property, at which point they might be forced to relinquish some of it to repay debt.

People will find out

Filing for bankruptcy has a negative stigma that causes many people to feel shame for going through the process. First of all, there is shouldn’t be any shame in filing for bankruptcy. Studies show that 10% of adults file for bankruptcy. Secondly, bankruptcy court cases are not generally published, which means the likelihood of someone finding out is minimal.

An attorney who is well-versed in bankruptcy law can help guide a client through the process of filing for bankruptcy. Legal counsel could also answer any questions and alleviate certain fears.