Bankruptcy Myths Debunked: Part 1

: Chris Lee Law Firm

  Filed under: Bankruptcy

There are many myths about bankruptcy that unnecessarily deter people from taking advantage of such a great debt relief tool. In fact, many of these are downright false. While we understand the bankruptcy process can seem scary, there is far more to be gained than lost in filing for debt resolution help.

Learning The Truth

One of the biggest concerns people carry into the bankruptcy process is the fate of their assets. Often stated that bankruptcy puts assets at risk of liquidation, this statement is misleading. The truth is that bankruptcy can offer a greater level of protection over your assets than letting your debts go unresolved. Bankruptcy exemption laws protect the majority of your essential assets like a house or car, and may even protect many of your valuables. The risks to your assets are minor and, generally, only come about for nonexempt assets in the cases in which debts cannot be repaid or eliminated otherwise.

Another misquoted aspect of bankruptcy leads people to believe that the process is that debts will be eliminated with severe credit damage as a result. While there are some aspects of credit damage held by anyone filing for bankruptcy, this came about long before they ever sought the help of bankruptcy. Filing for bankruptcy can actually improve your credit by removing high balances and negative payment histories, giving you a clean slate to start fresh. While you may face some challenges securing credit again in the future, chances are your hurdles would be greater had you not sought help in Texas bankruptcy court.


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