Debunking Bankruptcy Myths

| Sep 11, 2020 | Firm News |

You may not want to hear the word “bankruptcy” even when under significant financial stress. Bankruptcy can carry a stigma that makes people avoid it. However, many of the conceptions surrounding filing for bankruptcy are untrue. These myths can prevent people from getting the debt relief help they need.

Debunking and understanding these myths may help you get the right assistance and get out of an overwhelming situation.

Bankruptcy Myth #1: It Is A Sign Of Failure

One of the most common misconceptions about bankruptcy is that is a sign of failure, a red mark on your financial history. However, bankruptcy is designed to help people, not stigmatize their record. People who file for bankruptcy are offered a fresh start and are often able to get back on their feet.

Bankruptcy Myth #2: It Will Ruin Your Credit

While filing for bankruptcy puts an initial hit on your credit score, most people can recover from this relatively quickly. Bankruptcy will not destroy your credit score forever and it is more than possible to be approved for loans in the future.

Bankruptcy Myth #3: You’ll Lose Everything

Under no circumstances will you lose all your possessions. In fact, in most cases you are able to keep most of your property and assets after filing for bankruptcy. Aside from any unnecessary luxury goods or property not protected by exemptions, you can likely keep most of your possessions, so you aren’t left out in the cold after filing.

Bankruptcy Myth #4: It’s Hard

Filing for bankruptcy can actually be quite simple. While there are some aspects of the process that can be confusing, if you choose to work with an experienced bankruptcy attorney, the process is relatively painless.

Destigmatizing bankruptcy is important. People should feel comfortable seeking the financial help they need. Bankruptcy is not a sign of failure, or of irresponsible spending. In most cases, people fall into debt due to unexpected circumstances and they should be able to get assistance without feeling ashamed.