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Bankruptcy and Bad Credit Losing its Shame

Many People are Walking Away From Their Homes

Declaring personal bankruptcy may not carry the same stigma it once did.

As unemployment rates skyrocket and home values plummet, new attitudes toward debt may explain why more people are letting their homes and other assets go rather than working out a debt repayment plan in the nation’s bankruptcy courts.

“It’s not being looked at as a personal failure but a product of the times,” said credit counselor Rachel Hood.

“More people are throwing in the keys and saying, ‘OK, take my house,’ in a way I’ve never seen in the past. No matter how much they fight, at the end of the day, they’re still $50,000 underwater.

In the past, the home was a homeowner’s most important asset, but with tumbling property values, many find themselves owing far more than their home would sell for. For some, it often makes more sense to liquidate and start anew despite the hit on their credit.