Our Bankruptcy Blog

Filing for bankruptcy can be an intimidating and confusing process, and there are many myths and misconceptions surrounding it.

These myths can cause people to be hesitant about filing for bankruptcy, even when it might be the best option for them.

In this blog post, we will debunk some of the most common myths about filing for bankruptcy and provide accurate information to help you make an informed decision.

Myth #1: Filing for bankruptcy means you are financially irresponsible.

Many people believe that filing for bankruptcy is a sign of financial irresponsibility, but this is simply not true.

In fact, many people who file for bankruptcy do so because they have faced unexpected financial hardships such as a job loss, a medical emergency, or a divorce.

Filing for bankruptcy is a responsible way to address overwhelming debt and to start over with a clean slate.

Myth #2: Filing for bankruptcy will ruin your credit forever.

While it is true that filing for bankruptcy can have a negative impact on your credit score, it is not true that it will ruin your credit forever.

Bankruptcy stays on your credit report for 7-10 years, but you can start rebuilding your credit as soon as your bankruptcy case is closed.

There are many steps you can take to improve your credit after bankruptcy, such as making on-time payments, keeping your balances low, and being strategic about the types of credit you apply for.

Myth #3: You will lose all of your assets if you file for bankruptcy.

This is a common myth, but it is not entirely true. In most cases, you will be able to keep many of your assets when you file for bankruptcy.

This includes things like your home, your car, and your personal belongings.

The specific assets you are allowed to keep will depend on the type of bankruptcy you file and the exemptions available in your state.

Myth #4: You can only file for bankruptcy once.

While it is true that there are limits to how often you can file for bankruptcy, it is not true that you can only file once.

If you have previously filed for Chapter 7 bankruptcy, you must wait eight years before you can file again. If you have previously filed for Chapter 13 bankruptcy, you must wait two years before you can file again.

However, these waiting periods are not indefinite, and you can file for bankruptcy again if necessary.

Myth #5: Filing for bankruptcy means you will lose your job.

Employers should not fire you or discriminate against you for filing for bankruptcy.

In fact, it is illegal for an employer to fire or discriminate against an employee for any reason related to bankruptcy.

While there is no guarantee that your employer will not find out about your bankruptcy, it is unlikely to affect your job if you are in good standing and performing your job duties well.

Myth #6: You can only file for bankruptcy if you have a lot of debt.

There is no minimum amount of debt required to file for bankruptcy.

While many people who file for bankruptcy do so because they have overwhelming debt, others file because they need help managing their debt or because they have a large amount of unsecured debt such as medical bills or credit card debt.

Myth #7: You can discharge all types of debt in bankruptcy.

While bankruptcy can help you eliminate many types of debt, there are some types of debt that cannot be discharged in bankruptcy.

This includes most tax debt, student loans, and child support and alimony payments.

However, bankruptcy can still help you manage these debts by providing you with a repayment plan or by eliminating other types of debt to free up your finances.

Myth #8: Filing for bankruptcy is a lengthy and complicated process.

While filing for bankruptcy can be a complex process, it is not necessarily lengthy or overly complicated.

An experienced bankruptcy attorney can help guide you through the process and ensure that everything is done correctly and efficiently.

In fact, many bankruptcy cases can be resolved within a matter of months, allowing you to move forward with your financial fresh start.

Myth #9: You will never be able to obtain credit again after filing for bankruptcy.

While it is true that bankruptcy can have a negative impact on your credit score, it is not true that you will never be able to obtain credit again.

In fact, many people are able to obtain credit soon after their bankruptcy case is over.

While it may be more difficult to obtain credit and you may be subject to higher interest rates, it is still possible to rebuild your credit after bankruptcy.

Myth #10: Filing for bankruptcy is a sign of failure.

Many people believe that filing for bankruptcy is a sign of personal failure or moral weakness.

However, this simply is not true.

Filing for bankruptcy is a responsible way to address overwhelming debt and to start fresh with your finances. It takes courage to face your financial challenges head-on and to take the necessary steps to get back on track.

In conclusion, there are many myths and misconceptions surrounding filing for bankruptcy that can cause people to hesitate about taking this important step towards financial freedom.

By understanding the truth behind these myths and seeking the guidance of an experienced bankruptcy attorney, you can make an informed decision about whether bankruptcy is right for you and take the necessary steps to achieve a fresh start.