Bankruptcy Misconceptions

The word bankruptcy often brings feelings of fear and thoughts of failure. Many people assume that the bankruptcy process is simply a punishment for struggling with finances. Fortunately, that is a lie. The truth is, most people who seek bankruptcy are there through little fault of their own. Family are obligations, medical illness and job loss are all common reasons for people ending up in financial hardship. The truth is most of what people are afraid of in bankruptcy is simply not true and born from misconception.

Common Myths

I will lose everything. Most people think that they will lose all their property and belongings when they file for bankruptcy. That is not true. There are instances in which secured property, or debt tied to assets and collateral, may be at risk of liquidation. These are assets like your home and vehicle. However, the liquidation process of bankruptcy effects everyone differently. Not all bankruptcy filers will lose property, and many find that bankruptcy can actually resolve their debt while they keep the property. There are also bankruptcy exemption laws that protect many of the assets people fear were at risk of liquidation.
I will be blacklisted from getting credit again. Perhaps the most common misconception is that you’ll be blacklisted from getting credit after a bankruptcy. Again, this is not true. In fact, many people find their credit score improved following bankruptcy. This is because all of the high debt balances and delinquent payment histories have been eliminated. Further, some credit lenders even target post-bankruptcy consumers looking to rebuild their credit score with a new, smaller line of credit.
My friends and employer may think poorly of me. Although the bankruptcy process is not glamorous, many people tend to fear bankruptcy will make them look bad to others. The truth is filing for bankruptcy will resolve a debt problem; often becoming the better solution to financial hardship. While bankruptcy filings are public records, most people’s filing goes unnoticed unless someone is digging into your records as is. There are also laws that prohibit employers from discriminating against you based on your bankruptcy filing.
Filing for bankruptcy can be an overwhelming and confusing process. Our team of Dallas bankruptcy lawyers has walked many individuals through the process with ease and success. Call our office today at 214-440-1414 to learn more and ask questions regarding the bankruptcy process.