Thursday, June 27, 2013

Breaking Down Bankruptcy Stereotypes

It is easy to feel helpless when confronting serious financial problems in your life. The nature of banking and credit is that lenders benefit most when borrowers become less able to repay their debts—if everyone paid all their bills on time and in full, lenders would earn very little in interest. As a result, many types of credit—especially the types available to people with lower credit scores—are set up to charge such high interest rates and fees that small debts can very quickly escalate into overwhelming financial black holes. It might be tempting to shrink away from dealing with the situation, but the longer you delay, the worse it can become. If are worried you might be in over your head, consider seeking the advice of a St. Louis bankruptcy lawyer.

Bankruptcy for Beginners

Bankruptcy is a scary thought for many people. But despite the stereotypes you hear, most people know very little about how bankruptcy really works. Bankruptcy is not an opportunity for you to give your creditors the bird and walk away from your “mess.” But bankruptcy is also not move that will force you to give up everything you own and leave you with ruinous credit. The reality is somewhere in the middle of these extremes. Declaring bankruptcy can eliminate not all types of debt. In fact, in certain bankruptcy cases, the individual ends up paying most or all of what they owe (in a restructured, manageable payment plan). Most of the time, individuals that file for bankruptcy are able to keep all of their property. And while your credit score will certainly take a hit, most people are eligible for many types of loans within 2-3 years of filing.

Types of Bankruptcy

Bankruptcy law is actually a fairly complex legal practice. There are multiple types of bankruptcy filings, and each are subject to different eligibility requirements. It is crucial to understand which type of bankruptcy you would be eligible for—and what the implications of this filing mean for you—before you make the decision. For some people, alternatives to bankruptcy would make more sense in alleviating their financial stresses. An experienced St. Louis bankruptcy lawyer will be able to explain the different options to you. Being able to hand over some portion of this burden to a professional can give you the peace of mind you need to confront your situation.

This is a guest post written for the readers of Giveaway Lady. 

**DISCLOSURE: Please read my full disclosure policy HERE.**

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