Are you struggling with debt and thinking about filing for bankruptcy relief? Maybe you are hesitant because of negative rumors. There are many false narratives about filing for bankruptcy. Don’t let rumors or innuendos prevent you from obtaining a fresh start. While there are many false beliefs, some off the most common are as follows:
Only Financially Irresponsible People File for Bankruptcy Protection
This is perhaps the worst premise about bankruptcy and is furthest from the truth. While some people act irresponsibly with their available credit, studies show that over 90% of Americans file for bankruptcy relief because of unavoidable financial hardships. Such hardships are beyond their control such as medical emergencies, job layoffs, or divorce. The Founding Fathers created federal bankruptcy laws in the Constitution to help hard-working Americans overcome their financial struggles. If you choose to file for bankruptcy relief, you will join the over 1 million Americans who file bankruptcy each year.
You Could Lose Your Job If You File for Bankruptcy Protection
This is untrue. A law exists in the Bankruptcy Code, which specifically prohibits the government and many private employers from discriminating against those who file for bankruptcy relief. The bankruptcy law prohibits employers from discriminating against employees or job applicants because that person filed for bankruptcy relief. Research shows that employers are apt to hire someone who has filed for bankruptcy protection rather than someone who is struggles with unpaid debt.
Filing for Bankruptcy Protection Will Ruin Your Credit
This false assumption arises from the fact that a bankruptcy could remain on your credit report for up to 10 years. However, filing for bankruptcy relief does not mean that the bankruptcy will ruin your credit. Although credit scores may drop immediately after filing for bankruptcy, studies show that credit scores will actually increase after filing bankruptcy because much of the negative aspects of your debt are discharged once you complete the bankruptcy.
Also, many lenders may consider you a better credit risk as you have eliminated a lot of the debt you were paying, giving you more funds to pay toward new debt. You will more than likely be charged higher interest, but if handled reasonably, it could help reestablish your credit quickly.
You Will Lose Everything You Own If You File Bnkruptcy
This is one of the greatest fears of filing for bankruptcy relief. In the overwhelming majority of bankruptcy cases, those who file lose nothing. Bankruptcy laws have a built in mechanism that shield assets through personal property and homestead exemptions. Proper analysis by an experienced bankruptcy attorney can help you take advantage of the exemptions so that you protect your property.
Getting Help Filing Bankruptcy
Do not let false and negative assumptions prevent you from filing for bankruptcy protection and obtaining a financial fresh start. With the help of an experienced attorney, you can navigate past the false assumptions and onto the road of financial recovery.
Brock & Stout’s bankruptcy attorneys have over 25 years of experience helping clients like you get a financial fresh start. Contact us today for a free evaluation of your financial situation to see if we can help you.