It is no secret many American households struggle with debt and bankruptcy. The number of bankruptcy filings in 2005 hit a record high when an estimated one in every 55 households opted for bankruptcy.
Despite its prevalence, there is still much that many people do not understand about filing for bankruptcy. These myths can prevent people from doing what is best for their situation. Increase your knowledge to have an easier time getting out of debt.
Myth: Only irresponsible people end up with a lot of debt
This is not true in the slightest. Many people end up in extreme debt through no fault of their own. For instance, a person may suddenly become overwhelmed with debt due to an unexpected medical emergency. It can happen to anyone, and it is not indicative of any type of personal failure.
Myth: Debt collectors stop calling if you make a small payment
A huge burden people with excessive debt deal with is constant calls from debt collectors. Occasionally, the calls can become so severe that they occur at any time of day. Some collectors will even contact your place of work. Some people assume if you make a payment, then the collector will stop calling, at least for a little while. That may not necessarily happen. It is best to speak with your attorney before making payments because they may not truly help you.
Myth: Debt collectors are always right
When a debt collector says a person owes a certain amount, that person may not want to take that number at face value. Unfortunately, debt collectors occasionally implement shady tactics to get people to pay. One of these is lying about the true value owed. If a certain amount does not sound right, then it is prudent to look into the matter further to see if it is correct.
Myth: Filing for bankruptcy ruins financial future
People should expect to have a low credit rating for a while after filing for bankruptcy. However, that low rating may not stick around forever. Many people file for bankruptcy, and then years later, they get their credit score back on track.