Bankruptcy Myths

Are you struggling with overwhelming debt, but are you concerned about the consequences of bankruptcy? Does the bankruptcy process intimidate you? Are you worried you will never secure loans again after filing for bankruptcy? These are legitimate concerns; but, did you also know that the majority of your worries are probably based on myths about bankruptcy.

Myth 1: You will never get credit again!

Even though the bankruptcy will remain on your credit for up to ten years from the date of filing, you can start rebuilding your credit. After your bankruptcy is closed and discharged, with an adequate plan, you can purchase new homes, vehicles, and even qualify for credit cards much earlier than expected.

Myth 2: Lenders will ignore you after bankruptcy!

Most lenders understand personal problems with the challenging economic environment which the global crisis unfortunately experienced, and that affects consumers in general.
Interest rates may be higher, but you can still get credit after the bankruptcy filing.

Myth 3: You are an irresponsible person if you file for bankruptcy!

It is very typical to have difficult financial situations. Whether you lose your job and you can’t pay your debts, or become ill or injured and incur critical medical bills. These economic hardships may cause you to become desperate about your situation. This doesn’t make you a bad person for choosing bankruptcy relief.

Myth 4: Filing bankruptcy could trigger an IRS audit!

Nowadays, filing bankruptcy is much easier than in the past, thanks to electronic filing.
The law demands numerous forms to be filled and submitted to the court. A trustee may be assigned to your case for additional financial documentation, but audits are infrequent.

Myth 5: Personal bankruptcy will ruin your family!

Filing for bankruptcy may be seen as a fresh financial start, so it may actually offer a solution to some of your pressing problems.

Myth 6: You can only file for bankruptcy one time!

You are still allowed to file for bankruptcy more than once; it depends on when you filed and the type of bankruptcy.

Myth 7: Bankruptcy will solve all your financial problems!

If you can take advantage of bankruptcy, it can be the start of a new way of thinking about money. It may remove your obligation to pay your debts, but it can’t redress your spending habits or lifestyle.

Myth 8: Filing bankruptcy means you are a failure!

Various case studies over the past ten years have demonstrated that many bankruptcy cases are the result of uncontrolled issues, including medical debts, job loss, or divorce. That doesn’t mean they are a failure because they file bankruptcy. On the contrary, it indicates the need to make things right, and that they are doing something about it.

Contact an Elk Grove bankruptcy attorney today to get the facts from the myths that will help you determine if bankruptcy is a suitable solution for you.