For most people, a fear of one thing or another can draw focus and attention to the wrong things, mostly irrational beliefs that act as a safety mechanism to prevent them from potential harm. It’s easy to see why a fear of bankruptcy usually prevents people from looking at it as an option to help them solve their debt problems.
Fortunately, like other fears, gaining an understanding of bankruptcy can allow people to replace inaccurate beliefs with rational facts, and sooner help them take control of their finances.
Here are some common fears tied to bankruptcy, and the facts to help you face your fear and make better choices.
I won’t have access to credit ever again:
In the beginning, it’s true that you won’t have access to credit. This is where it is important to begin changing your perception. Not having access to credit is going to force you to discover new ways to afford the things you need and want. You’ll need to consider how to budget, save, and prioritize things into needs, wants, and stuff you can go without.
The fact that you claimed bankruptcy will stay on your credit report for six years, but you can start rebuilding your credit once you are discharged. In other words, once you are clear of your debt obligations, you can start over fresh.
If the idea of a clean slate scares you, don’t worry. Bankruptcy is going to come with professional financial counselling. Not only will you be guided through the steps of bankruptcy, but you’ll also get to work with a professional who will equip you with the knowledge to discover your own financial wellness.
I won’t be able to save money:
One common misconception about bankruptcy is the idea that you won’t be able to save money. While saving money is going to be a challenge, it is allowed. In fact, it is strongly encouraged to have emergency savings.
After you’ve paid your debts, continue making the same payments every month into a savings account. You’ve already proven that you can manage your finances. Now you can start building on that knowledge by making sure you don’t put yourself in that position again.
Bankruptcy means I’m a failure:
The fear of failure and damaging one’s reputation can often prevent people from even considering bankruptcy. Let’s step back and put the alternative under a microscope. Serious debt can cause years of suffering, resulting in sleepless nights, stress filled days, and major strain on your relationships and career. Combined with only ever being able to make minimum payments while your debt grows unmanageable, and you’re not quite going to consider your financial situation a success. Do you really have a solid plan on when the debt will be paid off? If not, then you will continue living with the stress of the debt.
Compare that to bankruptcy, a tool designed to help you, set you on the right track, and put you in front of some real professionals who are going to give you peace of mind and the ability to improve your finances going forward.
By understanding your options and redefining what you consider as ‘being a failure’, you’ll also be able to redefine what it means to successfully manage your finances.
Facing your fears of bankruptcy won’t only help you determine if it’s the right step for you, it will present you with options and resources designed to put your finances on track.
It’s important to get all of the necessary facts from a licensed insolvency trustee. Call Rita Anderson and Associates for a full financial assessment, and have your options outlined, questions answered, and fears dispelled.