Pride may be a Bad Reason to Avoid Bankruptcy
Written by Emil Fleysher | March 26, 2012 | Bankruptcy
For years economists and financial advisers have scratched their heads and wondered how so many Americans wound up in bankruptcy. The numbers show that total U.S. bankruptcies are in decline. U.S. bankruptcies dropped by 12% from November 2010 to November 2011. The total number of U.S. consumer bankruptcies should come in lower than 1.4 million.
Research has shown that Americans tend to wait far too long to look into bankruptcy protection, primarily out of shame and wounded pride. Half of the individuals interviewed wouldn’t even admit they were in bankruptcy, despite the fact that it was on the public record and easily accessible by anyone else who cared to look. It’s all about shame because consumers who admit to being in bankruptcy and have a financial plan to deal with it are much more likely to get on their feet again than those who go underground.
Blaming the bankruptcy court is a big mistake. A bankruptcy discharge issued by the judge is merely a determination that the debtor is financially unable to pay his debts. Until bankrupt Americans acknowledge their situation, and take steps to prevent it, or manage it better once they’re in bankruptcy, their financial situations will continue to suffer.
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