Do you know why bankruptcy is smart? Some people think bankruptcy is the equivalent of failure, but sadly they are misinformed. Active measures in accordance with the law that alleviate undue burden is the opposite of passivity and unassociated with failure in every regard.
Many lawyer from across the country would confirm that bankruptcy is smart because it helps you either get rid of your debt or restructure the debt so that you can regain control of your finances and finally resolve your debt burden. In both cases of restructuring or wiping out your debt your financial situation stabilizes and you receive relief from the burden imposed upon you. Essentially, the reason why bankruptcy is smart is because it enables you to have a brighter future.
Fighting mounds of debt for a long period of time eats away at savings, emergency funds, and ruins the outlook on retirement. Struggling with a burden of debt without bankruptcy is foolish when it is impossible to conquer within two years—at that point, that amount of debt is unsustainable. This shows us why bankruptcy is smart.
Filing for bankruptcy addresses your problem head on through a system that has been established and approved by the government. On the other hand, putting off dealing with debt can cost you needed money for retirement and accumulate overtime until there really is no hope. Studies have actually shown that those who have declared bankruptcy actually exhibit a better long term financial outlook over those who continually try to outrun it. According to liberty street economics the study following Insolvency after the 2005 Bankruptcy Reform concluded that “insolvent individuals who do not go bankrupt exhibit more financial stress than those who do, suggesting that these individuals would likely prefer to file for bankruptcy if they could afford it”.
In the public eye, filing for bankruptcy sometimes is seen as a sign of failure. The usual image of a man gone bankrupt is someone who cannot make ends meet and thus fails completely, forfeiting his assets and throwing himself at the mercy of the creditors. Nothing could be further from the truth; in fact, bankruptcy is a process designed specifically to improve a person’s quality of life in a multitude of ways.
After you run out of options, bankruptcy remains an open way to solve your problem. According to a recent study, households that have declared bankruptcy exhibit better long term financial health than those who avoid it like the plague.
It’s not an experience that’s entirely free of hassle or stress, of course, but it focuses all the problems into a single moment in time before leaving you with a fresh start (if filing for Chapter 7 bankruptcy) or with a clear roadmap to success for the next several years (under Chapter 13 bankruptcy).
Helps you make the smart decision
Financial stress causes people to make poor or very poor decisions when it comes to their personal finances. Filing for bankruptcy is smart because it helps you either discharge your debt or restructure it. In both cases, it helps you stabilize your financial situation and relieve yourself of the burden it imposes on you. Indirectly, it also helps you make smart decisions by preserving your smarts.
You’re Not AloneBankruptcy rates are high across the nation if we take into account the broad view. The bankruptcy rates have soared over the past forty years. In fact, they quadrupled between 1980 and 2004, and rose by a factor of 80 when compared to 1920.
It’s a combination of a changing economy, inflation, rising wealth inequality, prices and the runaway education debt that topped $1 trillion recently. A debtor who declares bankruptcy shouldn’t feel shame. It’s an adequate, smart response to an inadequate financial burden placed on them.
Summary
When your back is up against the wall, figuratively speaking, you should use appropriate measures. Bankruptcy is drastic, but bankruptcy is smart move, made by smart people. Limping ahead, chafing under the burden of debt is not a sustainable solution and it will end up giving you more trouble than facing the problem head on and eliminating it once and for all. We have great rates and your first consultation is FREE! Click here to learn more.