Accomplishing your financial management goals when you have a large amount of debt can seem impossible, especially when running a business. No matter how careful you can try to be when it comes to money, it can seem like you aren’t making a dent in your debt. You have to pay vendors, suppliers, lawyers, consultants, and more. The list is endless and the bills at times seem to pile up. However, even debt struggles can happen to even the most financially responsible people. Filing for bankruptcy is not an option that many people or businesses want to consider as a solution, but it can be the most sensible one. However, as a bankruptcy lawyer like one from The Law Offices of Ronald I. Chorches knows, there are many myths about bankruptcy that continue to go around.
Bankruptcy is often a person’s or business’s own fault
While some individuals who file for bankruptcy have made poor choices, many reasons for bankruptcy are not due to the individual. If for a business, it may be an opportunity to restructure. Some of the most common recesses that people file for bankruptcy are medical debt, a sudden job loss, or an emergency repair that they struggle to afford. In addition, many businesses experience losses with inventory or unpaid loans. In many cases, life events out of one’s control are the trigger that forces a person to file for bankruptcy.
Bankruptcy will cover you even if you spend credit recklessly
Your spending habits will still be closely evaluated even after going through the initial bankruptcy filing process. Many people believe that since credit card debt is one of the types of debt that get discharged by bankruptcy, they are free to maximize their credit spending with no consequences. The reality is that you could be accused of fraud if you do this, so you should still limit your credit card use after filing.
All of your debt can be wiped out
It’s important to know what debt you have that bankruptcy will actually cover. Not all debt is eligible to be eliminated by filing for bankruptcy. Student loans, child support payments and taxes that you owe are some of the things that still must be paid.
Bankruptcy fixes everything
Before you decide to file for bankruptcy, know that it is not a one-size-fits-all approach. Bankruptcy won’t solve every problem that you have. You still have to fulfill certain eligibility requirements, and the type of bankruptcy that you file for also affects whether or not you will still have debt to pay. Depending on your situation, bankruptcy might still be the best possible solution to help you solve your money problems.
It’s important that anyone looking for the right financial solution has the right information so that they can make the best choice. Contact a bankruptcy lawyer for more information and personalized guidance.