Let Us Bust A Few Common Myths About Bankruptcy
The word “bankruptcy” has long held a stigma in the English language. For more up-to-date insights about bankruptcy in today’s world, consider the following frequent misconceptions.
Schedule a consultation at your earliest convenience to talk over myths such as these with one of our bankruptcy law attorneys:
Myth #1: Bankruptcy Represents Complete Financial Ruin And Is A Sign Of Character Flaws
The facts: Many famous, well-respected Americans of past generations such as Benjamin Franklin, Abraham Lincoln and Walt Disney filed for bankruptcy at some point along their way to success. The tradition carries on today. If you conducted a poll among your friends, neighbors, coworkers and extended family, you might be quite surprised, indeed, to learn who all has filed bankruptcy at some point. Even if it feels regrettable, taking care of debts legally through bankruptcy may be the most sensible thing you can do in the face of overwhelming medical debts or business failure.
Myth #2: You Will Never Get Another Credit Card, Car Loan Or Mortgage Once The Word ‘Bankruptcy’ Appears On Your Credit Report
The facts: Many people receive multiple solicitations to get credit cards and take out car loans soon after completing a Chapter 7 bankruptcy. Why? Because creditors know they will not be eligible to file bankruptcy again for about seven years. Many bankruptcy filers find ways to buy houses again within a few years.
Myth #3: You Will Be Humiliated As You Lose Most Or All Of Your Personal Property When You Go Through Bankruptcy
The facts: State and federal exemptions allow people to keep reasonable amounts of possessions and exclude them from bankruptcy. Your wedding rings, the tools in your garage and your home furnishings will likely remain yours even if you file for bankruptcy. Whatever you do have to liquidate (if anything), doing so should not feel like a burden once you experience the financial fresh start of a debt discharge.
Myth #4: Your Retirement Plans Will Be Ruined If You File For Bankruptcy
The facts: Retirement accounts such as 401(k) funds, pensions and so on are typically safe from liquidation requirements. This is an important reason for which you should not dip into retirement accounts to pay medical bills and other overwhelming debts that ultimately prompt you to consider filing for bankruptcy.