Due to unexpected circumstances, it is possible for even the most financially responsible people to find themselves facing insurmountable debt one day. Fortunately, bankruptcy offers an effective way to get a fresh financial start. However, there are several myths about bankruptcy that keep many debtors from seeking this solution. If you are looking to learn the truth, here are a few of the most common misbeliefs surrounding bankruptcy.

Bankruptcy Misconceptions to Stop Believing Now

1. Filing Bankruptcy Will Make You Lose All Your Assets

In some cases, a Chapter 7 bankruptcy can require certain assets to be liquidated as a way to pay back a portion of what creditors are owed. This means there is potential for you to lose some of your property, but most states have an extensive list of exemptions that protects specific assets. More often than not, debtors are allowed to keep most, if not all, of their belongings. Filing a Chapter 13 bankruptcy will eliminate this concern completely, as liquidating assets is not part of the process.

2. Filing Bankruptcy Will Get Rid of Every Debt You Have

While it’s possible to get rid of a significant percentage of your financial obligations through bankruptcy, it will not provide total debt relief. Only unsecured debts are discharged in a Chapter 7 bankruptcy. As such, you will still be responsible for paying back secured debts, such as student loans, back taxes, alimony, and child support. In a Chapter 13, debt is reorganized into an affordable repayment plan that gives you three to five years to pay back your debt.

3. Filing Bankruptcy Will Damage Your Credit Forever

One of the biggest reasons people hesitate to file bankruptcy is because they’re afraid their credit will never recover. Although it is to be expected that your credit score will drop after declaring bankruptcy, filing will actually give you the chance to start improving your score once again. If you are considering bankruptcy, it’s likely your credit is already suffering from your current financial situation. Once your debt has been discharged, you can begin rebuilding your credit instantly.

Once you separate fact from fiction, you can make an educated decision on whether or not bankruptcy is your best option for regaining financial freedom. If you have questions about the bankruptcy process, don’t hesitate to get them answered by the legal team at Bueker Law Firm. Over the years, they have helped numerous residents throughout southeast and central Arkansas successfully reach their debt relief goals. They will conduct a thorough assessment of your situation to determine if bankruptcy is right for you. Call (870) 673-1313 to schedule a consultation, or visit them online for more information about their services.