Many people face financial struggles, you among them. While your immediate reaction to dealing with your financial hardships may be to keep them private, you may have reached a point where asking for help would work in your best interests. Of course, you may not feel entirely confident in knowing where to turn for such assistance.
If your outstanding liabilities have reached a seemingly insurmountable amount, you may want to give bankruptcy its due consideration. You may initially push this idea aside because you feel taking such a drastic approach would cause irreparable damage to your credit. However, this idea is a misconception that may be holding you back from obtaining financial relief.
You can still take out loans
One major misconception that may have you feeling that bankruptcy is not right for you relates to taking out loans. You, and many others, may think that once you file for bankruptcy you will lose your ability to take out loans in the future. While it is true that lenders do take a hard look at bankruptcy on a credit report, it does not necessarily completely disqualify you from obtaining a loan. In fact, after completing bankruptcy, you could take steps to improve your credit.
You may pay more but not much
As mentioned, lenders do take bankruptcy into consideration when determining loans and interest. However, you may not pay much more on certain loans than someone who has not filed for bankruptcy. For instance, if you take out a $15,000 auto loan within a year of completing bankruptcy, you may face an interest rate of 10.3 percent where a person who has not filed for bankruptcy may have an interest rate of 7.8 percent. Overall, this difference could mean that you pay an average of $2,171 more.
Fortunately, the timing of your loan request could also impact your interest rates and average additional costs. Because you can make efforts to improve your credit score over time, if you wait just two years after completing bankruptcy to file for that $15,000 car loan, you may only end up paying $799 more on average.
You can have a stable future
Though it can seem intimidating to take such a major step like filing for bankruptcy, having the right information may help you feel more at ease. By dispelling many myths and misconceptions, you may find that bankruptcy is much more beneficial than you had once thought. Therefore, it may prove wise for you to consider your options for moving forward with this debt relief option.