Debunking Common Myths Surrounding Bankruptcy

Most people think of bankruptcy as a bad word because they do not know much about it or believe in various myths. Bankruptcy has its own advantages. However, there is so much misinformation regarding the subject that people do not even consider filing in the first place. 

When you are burdened with debt, you should educate yourself about bankruptcy to make an informed decision. A bankruptcy lawyer in Katy can help you understand the concept of bankruptcy and whether it would be a wise decision to file. 

Bankruptcy myths 

  • People filing for bankruptcy are financially irresponsible. 

When people hear the word bankruptcy, they immediately negatively think of the person. However, not taking care of one’s finances and spending more than one can afford is not the only reason people fall into debt. The high cost of medical care, losing a job, or an expensive divorce can result in bankruptcy, and people usually have no control over these situations. 

  • People filing for bankruptcy will never get credit again. 

You may be surprised to know this, but bankruptcy does not affect your credit as much as you think it does. Bankruptcy stays on record for 10 years after filing. However, you can request a credit when your bankruptcy case is closed and discharged. People who had filed for bankruptcy were able to buy new homes, cars and qualify for credit cards. 

  • People lose their belongings after filing for bankruptcy. 

This is not true at all. In fact, many people do not lose anything when they file for bankruptcy debt relief. The key is to hire a skilled and experienced attorney to protect yourself during the process and save your home, vehicle, and other essential belongings. 

  • Bankruptcy gets rid of all past debts. 

If you hope for a fresh start after filing for bankruptcy, your expectations may not be met. While bankruptcy provides relief from various kinds of debts, it does not discharge all of them. If you have domestic obligations, you cannot remove them under any circumstances. Student loans are not relieved unless you prove hardship. 

  • People filing for bankruptcy are thieves and should go to jail. 

When a person borrows money and does not pay it back, people tend to think of them as thieves. However, that is wrong thinking. Bankruptcy filers are good people, just like you, but are in bad financial conditions. People choose bankruptcy for many reasons, such as job loss or illness, and in some cases, it can serve as the perfect solution. 

As you can see, most of these myths are designed to scare people off and think of bankruptcy as a bad thing. For this reason, people burdened with debt choose to stay in debt rather than solve the issue. Speak to a knowledgeable attorney about your debt options. 

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