Between the years 2006 and 2017, nearly 13 million consumers filed for bankruptcy in the United States. Despite that high number, many people still buy into old myths about bankruptcy law and just what it does and does not do. To help you better understand this subject and the many benefits bankruptcy provides, three common misconceptions about bankruptcy are dispelled below.

3 Bankruptcy Myths Dispelled

1. It Means Financial Ruin

Upon hearing the word bankruptcy, there is an automatic connotation of financial devastation for many people. But this isn't true at all; in fact, filing for bankruptcy is a very empowering move. You are taking back control of your financial affairs and economic well-being. Yes, your credit will initially take a hit, but you can immediately start taking steps to rebuild it. Opening a secured credit card is an easy and solid starting point, and you can do this right away after bankruptcy.

2. It Will Wipe Away All Debts

Unfortunately, bankruptcy is not a miracle eraser for every kind of debt. According to Chapter 7 bankruptcy law, only certain types of unsecured debt can be eliminated by filing. These include credit card balances, medical bills, past-due utilities, and rental payments. Among the debts generally not dischargeable in bankruptcy are student loans, child and spousal support, and tax obligations.

3. It Causes People to Lose Their Homes

Actually, just the opposite is true. When you file, any foreclosure currently in process against you must be temporarily stopped under bankruptcy law. This can give the filer some valuable time to work with their bankruptcy attorney and figure out ways to hang onto their home. Many Chapter 7 filers who are up to date on mortgage payments and without a lot of equity often keep their homes. Chapter 13 bankruptcy, which is a long-term debt repayment plan, allows you to keep your home as long as you can stay on top of both current mortgage payments and the past-due amounts included in the repayment plan.

Perhaps the biggest myth about bankruptcy law is that a filer doesn't have options, when, in reality, there are plenty of options to get you back on the road to financial solvency. Let Ray T. Kennington, Attorney at Law, help you explore those options. Since 1982, he has been representing the Ozark and Enterprise, Alabama, areas in bankruptcies, personal injuries, family law, and disability cases. Call (334) 445-1200 or visit his website to make an appointment today.