The word bankruptcy has an undeserved stigma. At its root, it is a legal term for a federal court process that helps both consumers and businesses get control of their debts by either eliminating those which cannot be repaid, or repaying them on more favorable terms.

Banks, credit card companies, and other lenders generate many billions of dollars of profit annually by charging interest to consumers and businesses. While anyone who borrows money should do their best to repay it, every lender expects that some percentage of borrowers will become over-extended and unable to repay their debts. Losses from these borrowers filing for bankruptcy protection are already baked into a lender’s business model, and represent a small blip on the bottom line.

No one who faces personal or business circumstances that lead to unmanageable amounts of debt should feel badly about exercising their right to file for bankruptcy. It is merely a legal strategy and financial tool that is available to protect one’s family, home, car, paycheck, business, and other precious assets from creditors.

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