Common bankruptcy myths are many. But they shouldn't deter filing for bankruptcy for those in need. Why? Because they are not true. Bankruptcy is a powerful financial tool for those unable to afford their debts. Your debts can be eliminated or, at the least, reorganized. Some of the most common misconceptions of bankruptcy are laid out in this post.
Common Bankruptcy Myth:
You Must Surrender Your AssetsNot true. One of the most common bankruptcy myths is that you cannot protect your property. Not so. Bankruptcy law allows you to protect your assets. Usually all of them. Exemption laws provide protection of your property when you file bankruptcy and, as a result, you don't have to lose everything. As I have counseled countless clients in Sacramento, you don't have to give up your possessions when you file bankruptcy. Bankruptcy laws let you keep your home, cars, cash and retirement. And the list goes on. Every case is different, as are individual finances. But the point is you don't have to surrender your property to gain debt relief through bankruptcy.
Common Bankruptcy Myth: Bankruptcy is Bad for Your Credit
It is. But if your debt is worse your credit can improve by filing bankruptcy. The key to determining whether to file for bankruptcy is weighing these factors. It is understandable that this is one of the most common bankruptcy myths. But your debt load must be considered in evaluating your bankruptcy options. Is it better on your credit to file bankruptcy and remove your debt? Or is it better to avoid bankruptcy and live with the debt on your credit? This is the question to ask. A Time Magazine article points out this balance.
No matter the financial need, bankruptcy can be a good option. Therefore, don't disregard bankruptcy. Living in debt is hard. Often debt begets more debt. It is a cycle bankruptcy can break. Bankruptcy myths should not be part of your decision whether to file for bankruptcy.
Contact my office for a free consultation to evaluate your options. You have nothing to lose, but your debt.