Are you considering bankruptcy to eliminate your debts, but afraid because of the stigma? Let’s talk about your perceived views on bankruptcy and debt relief through the lens of social stigma. We’ll also discuss why you may be keeping yourself from taking advantage of what could be your best option to cure your financial troubles.
When we discuss social stigma what we’re really talking about is a threat to one’s social identity, stress and coping, stereotyping, prejudice and discrimination. So, before you go and create an automatic stereotype activation of what you think of people who file for bankruptcy protection, come and let us reason. Perceived negative views from family and friends are enough to keep anyone down, but who really knows what is best for you anyway?
Stigma is a powerful with far-ranging effects on its targets, linked to poverty. Source Ultimately, you are the only one holding yourself back when it comes to making any meaningful change in your own life. In all honesty, what other people think of you is none of your business. Besides, how outdated are their opinions anyway. Here are some powerful facts about bankruptcy that just might blow their judgment right out the window.
Your credit score will actually improve after bankruptcy. The reason is that we’re clearing out the debt-to-credit line ratio and wiping out debt completely will drive up your credit score. Be sure to pull your own credit reports annually and verify the accuracy of the information. You’ll need to correct any errors and request any information that is more than seven years old to be removed too.
Using credit wisely requires discipline in avoiding carrying balances each month and paying interest on debt what you cannot afford. Have you ever asked yourself what you really need that credit score for anyway? In my opinion, most Americans cannot afford debt anyway. After five years from your bankruptcy discharge, you’ll be back on standard credit, which means you’ll get offers for standard Mastercard and Visa credit cards without any security requirements.
Bankruptcy can cut years off the time to repay those debts. I know that no one wants to file bankruptcy and the very thought of it might make you feel like a failure, or that you’ll ruin your credit. Nothing could be further from the truth here. Consider all the football players that have gone bust after millions flowed through their hands; JcPenny filed bankruptcy before he started the department store; Walt Disney too. Dave Ramsey filed for bankruptcy before he started his company on the premise that you all should get out of debt without it and created the “Debt Free Scream,” on his radio show in Tennessee.
Consider the chart below. This chart takes an individual with $30,000.00 in debt through three different methods for eliminating that debt. You can see the time value of money hard at work here.
If, instead of paying off your debt with $500.00 per month payments, you filed for bankruptcy under Chapter 7 because you qualified. You would have eliminated that $30,000.00 of debt immediately. Now, take that same amount and start a savings account. Here’s the difference. You could either be out of debt in nine years or have no debt, and savings nearing $55,000.00 from that same money. Now why on earth would you let stigma stop you from achieving your financial dreams?
In the end, the pros far outweigh the cons of bankruptcy. Unless you’re into suffering longer than anyone else, bankruptcy stops the financial insanity, creates financial stability and propels you toward your financial future faster and with greater protections than any other method.
Keep in mind that bankruptcy is not right for everyone. If you’ve lied, cheated, or stolen money; or if you simply have too many assets to lose, then you may want to steer clear because filing for bankruptcy is for the honest but unfortunate debtor. It is written in the Bible and it’s in our Constitution that you have a right to be free from debt. Learning more about bankruptcy as an option is only a phone call away.