What is Bankruptcy?
Bankruptcy Means More Than Financial Difficulties
People oftentimes use the term bankruptcy loosely to describe financial straits. What they may not understand is that bankruptcy describes a legal process under federal law. Through the bankruptcy process, debtors can discharge their debts or create a repayment plan to eliminate their debts over a period of years.
Is Bankruptcy Bad?
To many people, the term bankruptcy carries a negative connotation. This can prevent them from considering bankruptcy even if it is their best alternative. Although bankruptcy can remain on your credit report for ten years, it sometimes provides the only means by which you can begin rebuilding your credit score. When the alternative to filing bankruptcy is failing to make payments, your credit will receive negative marks regardless. If you are careful with your finances you can start rebuilding your credit immediately after petitioning for bankruptcy. In this regard, bankruptcy provides a new beginning.