Bankruptcy Myths

Unfortunately, the common assumptions of bankruptcy shed a negative light on the entire process. Don’t let myths and misinformation sway you away from a decision that could bring a substantial life improvement. We’ve put together a list of popular bankruptcy myths and have busted those myths with honest and expert answers.

Myth: I will lose my property and assets if I file for bankruptcy.

Truth: When you file Chapter 13 bankruptcy, you are able to keep property and assets, since you are not using these to repay creditors. When filing for Chapter 7, there are still properties and assets you will retain if filed and executed properly.

Myth: It is difficult to file for bankruptcy.

Truth: Making the decision to file for bankruptcy is far more difficult than the actual filing process. Using a bankruptcy attorney will take the extra time and stress out of the process and you will be on your way to a clean slate in no time.

Myth:  You will have difficulty ever buying anything again.

Truth: While you will have to work to re-establish credit after your debts are discharged, you are still able to purchase what you can afford. Many companies nowadays offer credit lines to those who have filed for bankruptcy.

Myth: I will lose my retirement benefits if I file for bankruptcy.

Truth: Pensions and 401(k)s are completely protected and will not be taken away.

Myth: Only the desperate file for bankruptcy.

Truth: With today’s economy and the increasing number of foreclosures, filing for bankruptcy is a common practice. Filing for bankruptcy is a responsible financial decision that can create a debt-free, low-stress financial future.

Myth: You can only file for bankruptcy protection once.

Truth: After eight years, you can file for Chapter 7 again. After a two year wait from discharge on a Chapter 13, you are able to file again.

Myth: All debts can be cleared through bankruptcy filing.

Truth: Unfortunately, this one is not true. While it can clear a large portion of your debt, it does not discharge child support, alimony, most student loans and most taxes. For more questions, contact one of our expert bankruptcy attorneys today!