Share:

If you are facing constant calls from creditors and seemingly impossible debt, it may be time to file for bankruptcy. While it can sound scary, for many people it is the best way to regain financial footing and move toward a more secure future. Unfortunately, many myths may deter you from taking advantage of this process. Get the facts here.

5 Bankruptcy Myths Busted

1. Your Credit Will Be Ruined

bankruptcyYes, a bankruptcy filing will show up on your credit report—but not forever. Depending on the type of filing, it will appear for a maximum of ten years. You can start rebuilding a strong credit score long before that by getting a secured credit card and making regular payments.

2. Bankruptcy Means Losing Everything You Own

It is possible you will lose some assets in bankruptcy. If you file for Chapter 7 bankruptcy, which focuses on liquidation, some non-protected assets may be seized and sold to repay creditors. However, most Chapter 7 cases are “no asset” cases, meaning the debtor doesn’t own property that would satisfy the debts listed in their petition.

3. You Can Erase All Debts With Bankruptcy

Though it provides a lot of relief from credit card debt and medical bills, bankruptcy doesn’t address all types of debt. For example, back taxes, child support, alimony and, in most cases, student loans are not subject to discharge.

4. You Can Go on a Shopping Spree Before Filing

If you plan to file for bankruptcy, you might think it’s the perfect time to make a big purchase like a new car. However, bankruptcy courts take a close look at all spending before filing and may charge you with fraud.

5. Filing for Bankruptcy Makes You a Failure

This misconception, unfortunately, impedes many people who would benefit from filing for bankruptcy. However, it’s important to remember bankruptcy was put in place as a financial tool to help consumers recover from financial setbacks, many of which are unforeseen and out of their control. Taking control of your debt doesn’t make you a failure—it makes you smart.

 

Filing for bankruptcy is a complicated process best pursued with the help of an attorney. For legal help in Rochester, NY, trust the Upstate Legal Center of John V. Shepard. With more than 30 years of experience, they will give you the guidance and personal attention you need to move towards a brighter financial future. Find out more about their practice areas, from estate planning to criminal law, online. To request a consultation, call (585) 429-5422.

tracking