Bankruptcy is a valid option when you are underwater financially and need a fresh start. But many refrain from filing for bankruptcy based on common misconceptions. If you are considering bankruptcy but have some common fears, read on to gain more knowledge to make a more informed decision.
Myth #1: Bankruptcy Will Ruin Your Financial Future
Many think that they will never be able to come back after bankruptcy. Will you ever be able to own a house? Will landlords trust you? Will you always be charged inflated interest rates? No. None of it is true. If you slowly rebuild your credit over time, your credit score can regain good standing, and you’ll be able to enjoy your fresh start.
Myth #2: You'll Lose Everything If You File for Bankruptcy
Another common misconception is that filing for bankruptcy means losing all your assets. But the truth is that many necessities are protected through exemptions, meaning you can maintain your primary living place and vehicle. You do not lose everything when filing for bankruptcy
Myth #3: Everyone Will Know About Your Bankruptcy
While bankruptcy is a matter of public record, it is only made known to others if they look it up. In most cases, your creditors and lenders are the only ones that find out about your bankruptcy filing. Your friends will likely never know about your bankruptcy unless you choose to disclose it.
Myth #4: You Can Choose to Exclude Certain Debts from Bankruptcy
When filing for bankruptcy, you must include a complete list of your debts. If you try to hide certain debts or assets, it will result in serious legal consequences. Always provide complete and accurate information to the bankruptcy court.
Myth #5: Bankruptcy Is Only for the Financially Irresponsible
Even if you are financially responsible, things happen that are beyond your control. If you are underwater financially and cannot imagine getting out of debt, filing for bankruptcy can be the responsible choice. Everyone is entitled to a fresh start. You can prove your competency by building your credit back up and starting anew.
Get the Help You Need
If you are struggling with overwhelming debt and considering bankruptcy, it's crucial to consult with a knowledgeable bankruptcy attorney who can help you understand the process and explore all available options. Don't let misconceptions dictate your financial future.
Contact Miles & Hatcher, LLP at (909) 481-4080 to schedule a free consultation with our experienced bankruptcy attorneys.