In Arkansas and the US today, CNBC cites that Americans have about $38,000 worth of personal debt. Most understand the risk of debt and fear drowning in money owed compared to income. When a person ends up in debt, his or her intentions are usually in the right place. Many people use credit cards to make ends meet, take out student loans for a better shot at higher income and a better job. With only good intentions, people wind up in more debt than they can stand. When the word bankruptcy comes up, these same people tend to hesitate. The hesitation stems from misconceptions.
The major misconception that people buy into is that if they file bankruptcy, they will lose all of their property. This is untrue. No one is going to repossess all assets or property. In fact, in most bankruptcy cases, there is no repossession. Debtors are entitled to keep your primary residence and the property necessary for your day-to-day life.
Bankruptcy will affect a person’s credit score. This is not the end of his or her good credit, however. Forbes explains that a 2017, a study showed that after two years 65% of people who file bankruptcy have a score of 640 or higher. Anyone can bounce back fast from a bankruptcy. With the right budget and the knowledge from landing in bankruptcy once before, debtors can make smart decisions with their money. These decisions may even involve rebuilding your credit with a credit card.
There is life after bankruptcy. If a person makes smart, responsible financial decisions, then he or she will see the results on your credit score.