Even with the legal complications that come with filing for bankruptcy, pursuing bankruptcy protection is often the best course of action for a person or company that is no longer able to make payments on existing debts. Although it is true that filing for bankruptcy can certainly help you in your financial troubles, there are a large number of bankruptcy misconceptions that may deter some individuals from pursuing bankruptcy as a way to get a fresh financial start.
Below are some of the most common misconceptions about the bankruptcy process, as well as the truth behind these myths.
- Your credit score will forever be ruined – as most people believe that filing for bankruptcy can permanently stain their credit score. Although a bankruptcy filing will stay on your record for a number of years, the effects of filing for bankruptcy is almost always less serious than it would be to continue to be unable to make regular payments on your debt, and getting a fresh financial start can make it possible for you to effectively rebuild your credit.
- You lose everything upon filing for bankruptcy – while it is true that you might need to sell some of your assets to pay off your debts, there are certain properties and assets that are exempted from being sold. Depending on the type of bankruptcy you file for, a bankruptcy lawyer can help you fight to retain as much of your property as possible which, for many filers, is everything.
- Bankruptcy is only for people who are financially irresponsible – many individuals and companies that find themselves filing for bankruptcy do so because of circumstances that are beyond their control. Certain issues such as long term unemployment, disability, medical bills, and family problems can come up that may drastically affect the financial status of a person, making it necessary for individuals to file for Chapter 7 or Chapter 13 bankruptcy.
If you are struggling under the weight of unmanageable debt, it is important to discuss your financial situation and all of the options available to you with an experienced professional. While bankruptcy is not right in every situation, many individuals and businesses find that bankruptcy, provides the relief they need to take control of their financial situation and secure a fresh start.