5 Common Myths about Bankruptcy

If you have found yourself in overwhelming debt that you know you cannot pay back, then you may consider consulting a bankruptcy attorney and file a bankruptcy case. Bankruptcy gives you an opportunity to start a new financial life, but there are several myths about bankruptcy that prevent people from availing this opportunity.

When considering filing a bankruptcy, it is important that you differentiate between myths and facts and understand the ins and outs of the process. Having right information at the right time is essential to make a well-informed financial decision. In this post, we are debunking 5 common myths associated to bankruptcy.

Myth No. 1: Bankruptcy is for irresponsible people who do not know how to manage their finances

There is this certain stigma associated to bankruptcy that prevents people from filing a bankruptcy case. Fact is that many people who file a bankruptcy did not take any financial risk or acted irresponsible. Life changing events such as long-term unemployment, medical expenses after an injury, legal fees associated with divorce, etc. can cause people to file for bankruptcy.
As a matter of fact, a decision to file bankruptcy at the right time indicates a person’s foresightedness and responsibility.

Myth No. 2: Bankruptcy will destroy my credit report and I may never be able to qualify for a loan after bankruptcy

Bankruptcy is an escape for people who are already buried under debt. One can always rebuild their credit score after recovering from bankruptcy. There will always be lenders who will be ready to lend you money. You just need to choose your options wisely after comparing the interest rates.

Myth No. 3: If you are married, your spouse is always required to file a bankruptcy case

There are certain conditions where it is beneficial for a couple to file bankruptcy jointly, but the law does not mandate joint filing of married people. If you have a lot of debt in your name, your spouse should not be affected.

Myth No.4: If I file a bankruptcy, I will lose everything I own

This is the most common misconception about bankruptcy and keeps many people from filing a bankruptcy when it may be the best option for them. Bankruptcy laws regarding exempted property vary from state to state, but all states protect basic assets such as your retirement plan, household goods, etc.

Myth No. 5: Filing for bankruptcy is a very complex procedure

With the help of an experienced bankruptcy attorney, you can easily complete the process. They help you choose the right bankruptcy chapter according to your circumstances and answer all your bankruptcy-related queries.

If you feel bankruptcy is the only solution available to you to get rid of creditors’ harassing calls, you should contact Brock & Stout. We are experienced bankruptcy attorneys providing legal advice to help people get back on their feet again. Call us at our toll free number (800) 884-9600 and receive bankruptcy advice from an experienced attorney.