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Common Misconceptions About Bankruptcy

Recent economic downturns have made bankruptcy filings more prevalent than ever, but that doesn’t mean that myths about bankruptcy have gone away. If you’re thinking about filing for bankruptcy, you need sound information to help you make the right decision. Read on to learn the truth behind some of the major myths about bankruptcy.

Myth: I’ll have to give up all my property if I file for bankruptcy.

Truth: Depending on which type of bankruptcy you file, you will forfeit little or none of your property. In Chapter 7 bankruptcy, you will have to sell certain items of property that are not subject to exemptions. You can keep some of the equity in your home and car, your retirement accounts, and enough personal property to comfortably start over. If you file for Chapter 13 bankruptcy, you will not have to forfeit any property.

Myth: After bankruptcy, I’ll never get credit again.

Truth: Though bankruptcy has a negative effect on your credit score, you can work to undo this. Within a few years, with responsible financial habits, you may even qualify for a home or car loan. Bankruptcy will stay on your credit report for years, but there is plenty you can do to balance it out.

Myth: Bankruptcy will eliminate all of my debts.

Truth: Bankruptcy does eliminate many debts, like credit card and medical bills, but it has its limitations. For example, student loans, child support, and alimony will survive a bankruptcy.

Myth: Bankruptcy is for deadbeats and losers.

Truth: Bankruptcy is for hard-working Americans who, for whatever reason, find themselves overwhelmed by debt. Do not feel ashamed or embarrassed about filing for bankruptcy. Remind yourself that you’re taking action to resolve your debt and improve your financial situation.

Cutler & Associates has more than 25 years of experience helping people just like you deal with their debts through bankruptcy. If you’d like to schedule a consultation at one of our Chicagoland offices, call (847) 849-1834. With locations in Aurora, Schaumburg and more, you can count on our attorneys to provide personalized, caring service in this difficult time.

Disclaimer:

The materials available at this website are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use and access to this website or any of the links contained within the site do not create an attorney-client relationship. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.

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Categories: Bankruptcy Blog

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