If you are struggling with overwhelming debt, you are not alone. According to one report, around 14% of U.S. households owe more in unpaid debts than what own. However, each year less than 1% of these households address their financial issues by filing for bankruptcy. This may be because bankruptcy has a negative stigma, and people may fear they will lose everything or that their credit will be marred forever if they file for bankruptcy. However, filing for bankruptcy can be a good way for people in Virginia to address unmanageable debt in a way that leads to a brighter financial future.
You will not lose everything if you file for bankruptcy
When you are struggling financially, you naturally want to hold on to the few assets you have, such as your automobile and your house. And, the bankruptcy code recognizes that people need to retain certain assets to get by day-to-day. For this reason, the bankruptcy code has exemptions that allow people who file Chapter 7 bankruptcy to retain certain assets. And, if you file for Chapter 13 bankruptcy, none of your assets will be liquidated to pay back your debts.
Your credit will not be ruined forever if you file for bankruptcy
It is true that a bankruptcy filing will stay on your credit report for up to one decade. However, after you file for bankruptcy, it may not take that long for your credit score to improve. Certain types of mortgages may be available as soon as two years following a bankruptcy discharge. Other loans may be available as soon as four years following a bankruptcy discharge. In addition, you may be able to get a secured credit card after only a few months following a bankruptcy discharge.
Do not be afraid to file for bankruptcy
As this shows, there is hope in filing for bankruptcy. Filing bankruptcy does not deserve the negative reputation it has among some. Those in the Roanoke area who are struggling with debt will want to consider whether filing for Chapter 7 or Chapter 13 bankruptcy is a viable means for them to address their debts so they can move forward on solid financial footing.