Bankruptcy Myths that Need Busting
MYTH: a widely held, but false idea or belief that has been passed down from one generation to another.
In this area of practice, we deal with people who are confused and fearful of filing bankruptcy. These myths have given the term a negative connotation. Ignorance of the benefits causes people to hold back from asking questions and getting informative answers from knowledgeable bankruptcy lawyers.
Below are some common myths about bankruptcy that we would like to shed some light on:
You will lose all of your property if you file for bankruptcy
There is nothing further from the truth. After filing bankruptcy most individuals don’t end up losing their property or assets that are paid off. This is because the bankruptcy exemption laws protect most of their property. In cases when you are paying on the property, there are scenarios where this can remain as long as you continue to make the payments.
Bankruptcy is difficult
The word bankruptcy carries a sense of fear and dread with it which also leads to confusion. There can be terms and phrases that you may or may not understand, but this doesn’t have to stall you. If you hire a competent bankruptcy lawyer that understands all your options the process will be much easier and far less stressful.
If you are married both spouses should file for bankruptcy
You have the option of filing for joint or individual bankruptcy. If you file an individual bankruptcy then your spouse’s finances are not involved in any way. In most cases a joint bankruptcy will help protect more of your property, and will also discharge more debt. This often occurs when you get married and carry debt(s) into the marriage. There are numerous situations where both parties will not be required to file. A bankruptcy lawyer can help you decide which option is best for you and your family.
You will lose your job if you file bankruptcy
No employer is allowed by law to fire or take any other adverse action against an employee who files for bankruptcy protection.
If you file bankruptcy everyone will know about it
This is completely false! Unless you are a well-known public figure, chances are no one will find out that you have filed for bankruptcy. There is a strict confidentiality agreement between all parties involved.
You will never have good credit again
Absolutely not true! A bankruptcy can stay on your credit report for up to 7-10 years (depending on which type of bankruptcy you file). Once you successfully complete the bankruptcy process it won’t be long before you are able to obtain a credit card, and start building your credit back up. As long as you pay your bills on time and budget your finances safely you can build your credit back up in as little as a few years. Here is a great article on the steps you should take after filing bankruptcy to put you on the fast track to financial success.