Bankruptcy is often surrounded by many myths and misconceptions. Unfortunately, these myths about bankruptcy can deter individuals from considering it as a viable option for managing overwhelming debt.
W. Ron Adams, an experienced bankruptcy attorney from Erlanger, KY, sheds light on these common myths, providing clarity and factual insight to help those in financial distress make informed decisions.
Key Takeaways:
- Misunderstandings about bankruptcy can lead to unnecessary anxiety and prevent people from taking action that might set them on a path to financial recovery.
- W. Ron Adams can offer professional guidance, ensuring that the myths surrounding bankruptcy do not cloud your judgment so you can get the fresh start you deserve.
Table of Contents
- Bankruptcy Ruins Your Credit Forever
- You’ll Lose Everything You Own
- Filing for Bankruptcy is a Personal Failure
- All Debts Can Be Wiped Out in Bankruptcy
- Filing for Bankruptcy is Difficult and Complicated
- You Can’t Buy Property After Filing for Bankruptcy
- You Can Only File for Bankruptcy Once in a Lifetime
- Bankruptcy Leads to Unemployment
- You Can Pick and Choose Which Debts to Include
- Married Couples Must Both File for Bankruptcy
Myth 1: Bankruptcy Ruins Your Credit Forever
Truth: While bankruptcy does impact your credit score and remains on your credit report for 7 to 10 years depending on the chapter filed, it does not permanently ruin your credit. Many individuals can start rebuilding their credit soon after bankruptcy. Some even achieve better credit scores long before the bankruptcy falls off their report.
Myth 2: You Will Lose Everything You Own
Truth: Bankruptcy laws include exemptions that protect certain assets, such as your home, car, and personal belongings, up to a certain value. In Chapter 7 filings, 99.99% of the time, the filers keep all their possessions.
Myth 3: Filing for Bankruptcy is a Personal Failure
Truth: Bankruptcy is a legal tool designed to provide people with a way to reset their financial situation. It can happen to anyone and often results from unforeseen circumstances like medical expenses, divorce, or job loss, not from financial irresponsibility. Remember, filing for bankruptcy is one of the most honest and responsible decisions you can make for your family or business.
Myth 4: All Debts Can Be Wiped Out in Bankruptcy
Truth: While bankruptcy can discharge many types of debt, such as credit card debt and medical bills, some obligations like student loans, certain taxes, alimony, and child support are typically not dischargeable.
Myth 5: Filing for Bankruptcy is Difficult and Complicated
Truth: The bankruptcy filing process does involve specific procedures and legal requirements. However, with the help of a knowledgeable bankruptcy attorney in Erlanger, KY, the process becomes straightforward and is often smoother than expected.
Myth 6: You Can’t Buy Property After Filing for Bankruptcy
Truth: While bankruptcy does present short-term challenges to purchasing a home, it also offers a strategic route to eliminate unbearable debts and start afresh. With proper planning, rebuilding efforts, and the right financial guidance, buying a home post-bankruptcy is not only possible but can be a reality sooner than many think.
Myth 7: You Can Only File for Bankruptcy Once in a Lifetime
Truth: You can file for bankruptcy more than once in your life. However, there are time limits between discharges, ranging from 2 to 8 years, depending on the type of bankruptcy previously filed and the type you plan to file.
Myth 8: Bankruptcy Leads to Unemployment
Truth: It’s illegal for employers to terminate employment or discriminate against you because you’ve filed for bankruptcy. While bankruptcy filings are public records, most employers do not routinely check this unless it is relevant to your job.
Myth 9: You Can Pick and Choose Which Debts to Include
Truth: When filing for bankruptcy, you must list all your debts. However, you can choose to reaffirm certain debts, such as a car loan or mortgage, to keep the asset and continue paying under the original contract terms.
Myth 10: Married Couples Must Both File for Bankruptcy
Truth: One spouse can file for bankruptcy independently of the other. It may depend on the couple’s debt load, asset ownership, and other personal financial factors. The best step is to make the decision based on an assessment by a bankruptcy attorney.
Consult With the Top Erlanger KY Bankruptcy Attorney
Get the top-rated and respected Erlanger KY bankruptcy attorney, W. Ron Adams on your case. Attorney Ron and his team of lawyers will help you through the complexities of the entire bankruptcy process including protecting you from harassment. To get started, contact us to schedule a free consultation.
