No one is ever happy to file for, or sometimes even talk about bankruptcy. This is understandable for those filing—they're often dealing with daunting uncertainties about their future. However, this attitude has also allowed many misconceptions about bankruptcy emerge and occupy the public's imagination.
Below, we take a look at four of the most common myths about bankruptcy and what the truth really is about this necessary and effective form of debt relief.
Those That File Are Irresponsible
There is a prevalent idea out there that those that file for bankruptcy somehow "deserve" it due to a reckless handling of their own finances. This could not be further from the truth.
Individuals, families, and business can suffer an array of different hardships that have nothing to do with their own actions. Businesses can fail. There can be unexpected deaths or illnesses. The economy can suffer.
Once you see past the stigma of bankruptcy, it's easy to realize that debt relief actions like bankruptcy are nothing to ever be ashamed of.
I Will Lose Everything I Own
Not true. There is a misconception that bankruptcy forces filers to surrender or sell all their property in order to pay off as much debt as they can. While the relinquishment of some property may be necessary, it is far more likely you retain most of your property.
In fact, under Chapter 13 bankruptcy, you keep all of your assets and have final say over what you may keep and what you may sell.
Filing Will Make Me Debt-Free
This is also false. While some forms of bankruptcy discharge some debts, most filers do not become instantly debt free.
Student loans, for example, are usually not figured into debt relief. In a Chapter 13 bankruptcy, you keep your debts, but reorganize them and establish a payment plan that is actually manageable.
Bankruptcy Will Forever Taint My Credit
It's true - filing for bankruptcy is not good for your credit. However, with proper vigilance, your credit will not be permanently hobbled.
After filing for bankruptcy, you will have limited access to credit, but with proper planning and discipline, it is possible to rebuild your credit over time. Working with a knowledgeable lawyer can put you on this path and help ensure that your bankruptcy does not have a long-term effect on your financial trajectory.
Are you considering bankruptcy? Then Nguyen Law Group is ready to hear from you. Attorney Andy Nguyen has navigated countless bankruptcies for his clients and offers flexible and accommodating payment plans to ensure that his clients get the counsel and advocacy they need.
There is a light at the end of the tunnel. Our firm is ready to help you reach it. Contact us to request a free case evaluation today.