Bankruptcy law was created to provide honest Americans with a pathway toward a brighter financial future. If you have been struggling with insurmountable debt, bankruptcy may be a viable option for you to gain control of your finances. At Bridges, Jillisky & Streng, LLC, our bankruptcy lawyers help individuals, families, and businesses throughout Union County better understand their rights and debt relief options. Because there is a lot of misinformation surrounding bankruptcy, a lot of this involves having to bust common myths.
Below, our legal team discusses some of the most common bankruptcy myths and misconceptions we hear from clients and explains why they’re wrong.
Bankruptcy will ruin your credit forever.
A lot of people have unrealistic concerns that bankruptcy will forever tarnish their name and reputation, and ruin their credit permanently. This couldn’t be further from the truth. While bankruptcy can impact your credit score, the effect won’t be ruinous and it certainly won’t be permanent. With time and responsible credit practices, many individuals who file bankruptcy are able to rebuild their credit to scores higher than they’ve ever had before. Bankruptcy is a stepping stone to a brighter financial future – not a scarlet letter that limits your life forever.
When you file bankruptcy, you will lose everything.
This myth is driven by the similar misconception that bankruptcy punishes more than it helps. As we’ve stated, bankruptcy was meant to help those who find themselves struggling with large debt loads, and it has built-in laws that allow individuals to protect certain assets and property by claiming exemptions. Additionally, bankruptcy can be a powerful tool in defending against foreclosure and protecting one’s home. All situations are different, but if thinking you’ll be down and out with only the shirt on your back is what life after bankruptcy looks, that’s simply not true.
Bankruptcy will eliminate all my debts.
Bankruptcy can be a powerful mechanism for reducing overwhelming debt loads, but it doesn’t miraculously eliminate all of your debts. When filing Chapter 7 or Chapter 13 bankruptcy, any individuals are able to eliminate or substantially reduce unsecured debts such as credit card debt and medical bills, but there are certain secured debts that cannot be discharged. These may include student loan debt, child and spousal support, court fines and fees, and certain taxes.
Filing bankruptcy on your own is easy!
There are no laws requiring debtors to have legal representation when filing bankruptcy, and individuals can file on their own. Because the process can be very complex and filled with lots of legal work, many people choose to place their trust in attorneys who have the experience and resources to guide them through the process and handle any issues or complications that arise. Bankruptcy is also an important moment in one’s life, and a process that can be harnessed in the pursuit of better financial health. With so much on the line, attempting to stumble through the process on your own could negatively impact your future. Our lawyers do everything we can to help clients not only navigate the legal process, but also prepare for a future of financial success.
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Bridges, Jillisky & Streng, LLC is passionate about helping local residents fully understand their rights and what to expect when it comes to bankruptcy. We offer free consultations and encourage you to reach out to our firm to discuss your case personally with a lawyer. Contact us today to get started