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Addressing common misconceptions about bankruptcy

On Behalf of | Jul 30, 2021 | Bankruptcy |

When facing extended periods of financial strain, it might not be uncommon for many individuals in Mississippi to face an understandable need for relief. While outlets such as bankruptcy may be just the tool with which to achieve such a goal, there are some misconceptions about the process that might cause some to hesitate to explore the benefits involved. Addressing these concerns could be integral to helping a person move past unnecessary reservations and prepare to protect his or her financial future.

While filing for bankruptcy is a major financial decision, choosing to forgo the process due to fear of the repercussion involved might not always be favorable, especially if due to some common misconceptions about the process, such as:

  • Impact on credit: One common misconception may pertain to the impact the process will have on one’s credit. While a bankruptcy will affect one’s credit score, this might not be as bad as it seems, and the alternatives could carry greater repercussions.
  • Credit report: Another possible cause of hesitation could involve the idea that a bankruptcy will remain on one’s credit report throughout life, when in reality, it may only appear on this report for up to 10 years.
  • Future opportunities: Some may also worry that a bankruptcy will prevent them from being eligible for additional lines of credit in the future, but this may only prove a temporary concern.
  • Improving one’s credit score: Myths about rebuilding credit after bankruptcy may also lead to hesitation, which could be unnecessary, as one may be able to start taking steps to achieve such a goal soon after finalizing the bankruptcy process.

Understanding how bankruptcy might affect one’s credit score and how one’s assets will be handled during the process could be vital to making informed decisions when seeking debt relief.

With a variety of topics to consider, each of which might be mired in common misconceptions, the idea of seeking relief through bankruptcy can seem an intimidating concept. Individuals in Mississippi who face similar concerns and wish to seek advice on what to expect from the bankruptcy process could consider consulting with an attorney for guidance in addressing every essential topic. An attorney can evaluate a client’s financial situation and assist in creating a plan to reduce or eliminate his or debts through the appropriate outlets.