Many people have heard about bankruptcy, but there is also a great deal of misinformation about the bankruptcy process. These myths may make you unwilling to consider bankruptcy, and knowing the truth about this process could be key to making an informed decision about your debts.
Myth 1: Only irresponsible spenders file for bankruptcy.
Many people believe that bankruptcy is only for people who overspend or make irresponsible investments. The truth is that bankruptcy is an option for many different people who find themselves in a difficult financial situation. Most households do not have enough savings set aside to handle medical emergencies, unemployment or other financial difficulties, and bankruptcy could offer these people meaningful relief from their debt after an emergency impacts their finances.
Myth 2: If you file for bankruptcy, you will lose everything.
While you may lose some of your assets after filing for bankruptcy, the fact is that there are legal exceptions available that could protect the property that matters most.
Myth 3: You cannot rebuild your credit after bankruptcy.
While bankruptcy filings will stay on your credit report for several years, it is possible to rebuild your credit after bankruptcy. By making small purchases and regular payments on a secured or co-signed credit card, you can begin to rebuild your credit score.
Myth 4: The bankruptcy process is too difficult.
While facing bankruptcy alone can be a challenge, experienced bankruptcy attorneys can guide you through the process. Not only will working with a lawyer make the process more straightforward, they can also answer any questions you may have along the way and dispel any myths about the bankruptcy process.