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Is Declaring Bankruptcy That Bad?

Is Declaring Bankruptcy That Bad?

Bankruptcy carries a negative stigma, and you may have heard many people tell you that bankruptcy is bad. Why is the general consensus that filing for bankruptcy is bad? Filing for bankruptcy shows that the applicant has trouble with personal finances, but there is much more to the story. A large part of why people think filing for bankruptcies is bad is that they do not understand the process. Every bankruptcy case is unique, and consumers are forced into bankruptcy for many different reasons, some of which are beyond their control.

Unforeseen Life Events Can Lead to Bankruptcy

Not all bankruptcies are caused by people taking out credit cards to purchase luxury items they do not need. Instead, many bankruptcies are due to unforeseen and uncontrollable circumstances. We are currently in a recession due to the coronavirus pandemic, and many people have been laid off from their jobs or had their hours cut due to no fault of their own. A lack of financial planning or control over one’s impersonal finances cannot shield someone from the financial consequences of being laid off or having to take a lot of time off because of illness.

Many bankruptcies are caused by mounting medical bills. When a person becomes ill, they may get fired from their job because they need to take time off for treatment. As a result, they lose their health insurance, making it impossible to pay their medical bills. Coping with a serious illness can easily result in medical bills over $1 million. An unforeseen car accident, a cancer diagnosis, or a COVID-19 diagnosis with ongoing, long-term symptoms can result in a financial collapse that requires filing for bankruptcy.

Why Does Filing for Bankruptcy Have Such a Bad Reputation?

Filing for bankruptcy is viewed as a bad decision in many circles because it hurts your credit score. It is true that filing for bankruptcy will have a negative effect on your credit score and will appear as a public record for 10 years after you file for bankruptcy. However, most consumers who file for bankruptcy already struggle with a negative credit score because of their late payments or missed payments.

Whether or not bankruptcy is bad depends on whether you intend to defraud the system or file for bankruptcy in good faith. If you have significant credit card debt, filing for bankruptcy to discharge credit cards at 29% interest would typically not be considered bad by most people. Likewise, if you have medical bills that you cannot pay or student loans that you cannot pay, filing for bankruptcy can help you have a fresh financial start to pay the debts that will not be discharged at the end of the bankruptcy.

Contact a San Diego Bankruptcy Attorney Today

If you are wondering whether filing for bankruptcy would be a wrong decision in your case, the best thing you can do is talk to an attorney. Bankruptcy itself is not inherently good or bad, and it can be an important protection for honest applicants who find themselves in trouble with debt. Contact the skilled bankruptcy attorneys Bankruptcy Law Center today to schedule your initial consultation.

See What Our Clients Have To Say

Yelp Review

Roger C.

I reached out to BLC to help assist with a chapter 7 business bankruptcy and they provided excellent guidance, advice, and support through the entire process. In my case an adversarial action was filed by one of the creditors and attorney Ahren Tiller and his staff provided sound ...arguments which prevailed. Couldn’t have found a more experienced and supportive team to represent me in a tricky situation. I would highly recommend them to anyone making the difficult but sometime necessary decision to find financial relief. Read more
Yelp Review

Justin R.

Like many others before and during the pandemic, life happenings caused me to be in a financial situation to warrant bankruptcy. The BLC was super professional all the way through the entire process. Right after I paid for my Bankruptcy, I got sick and had to have surgery and recovery. Then we ...were in full Pandemic mode. They were gracious to delay my filing until I was recovered and ready to file. I could not ask for more. The process was over all quick and painless for a simple Bankruptcy like mine. I feel a weight has been lifted and I can rebuild. Thank you for all your arduous work and patience, Gabriel, Ahren, and their teams are knowledgeable and efficient. Read more
Google Review

Katey Huntley

Responsive, friendly, kind, extremely easy to work with! So knowledgeable and made this entire process painless. Very grateful!

Google Review

Lynn Molina

Gabriel Hanna, Esq and the staff at BLC helped me in a very difficult time. I appreciate all the help and care they gave my case.

Google Review

Linda Cramer

I can’t say enough of how much this bankruptcy law firm helped me with my financial situation. They were all so helpful, efficient and made the difficult time and process as quick and easy as possible. I would recommend them to anyone I know and am glad to give my public recommendation as well. T...hey truly deserve a five star plus rating. Read more
Yelp Review

Andrea N.

I am very happy with my experience with BLC. Bankruptcy is not something anyone wants to go through, however everyone at BLC made my experience pleasant and easy. The process was explained thoroughly and I had an easy time reaching out and connecting with my attorney. Anika Renaud-Kim was my attorney ...and she was nothing short of amazing! She was very patient and generous with her time. Ms. Renaud-Kim definitely made me feel at ease and comfortable through the entire process. Read more
Facebook Review

Lidia Paramore

they did a great job for me, helped me anytime I needed something, my Lawyer Gabriel Hanna is the best, gave lots of confidence all the time..thanks BLC I will.always recommend you, I’m very grateful for your service!!!

Yelp Review

Rachael C.

When searching for information I had called a few different firms and received consults. BLC was the only one who didn’t shy away and provided answers and information during the consult. Once I agreed to move forward, they were supportive, informative, and eased my anxiety through the whole process.... I can’t recommend them enough. Read more
Google Review

Emily Martinez

AmazingI had many questions and uncertainties and the carefully explained it all and made it easy to understand. They facilitated a fast and easy process making this scary difficult thing simple

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Legal Disclaimer: The Bankruptcy Law Center is a California Licensed law firm with attorneys licensed in the state of CA, NY. Attorney Ahren Tiller is responsible for this advertisement. Bankruptcy Law Center’s principal office is located at 1230 Columbia st. Suite 850 San Diego, CA 92101. Prior results listed on this site do not depict or in any way infer a prediction or outcome.We are a debt relief agency proudly providing options to people with financial problems. View our Privacy Policy

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